Assembly Bill No. 680–Committee on Commerce and Labor

(On Behalf of Division of Insurance)

March 22, 1999

____________

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes to provisions relating to insurance. (BDR 57-651)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: No.

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

 

AN ACT relating to insurance; revising the fees for the issuance and renewal of a license for a surplus lines broker; revising the provisions governing authorized investments by insurers; requiring the commissioner of insurance to adopt regulations for the licensing of provider-sponsored organizations; revising the requirements for certain insurers to accept surplus lines risks; clarifying the authority of the commissioner to impose a fine or penalty or initiate or continue a disciplinary proceeding against a person who has voluntarily surrendered his license or certificate of registration; revising the provisions governing the disclosure statement required for certain umbrella policies; revising various provisions governing health insurance; requiring an applicant for a license as a general agent to file a bond; revising the requirements for the issuance of a certificate of registration as an administrator; revising the qualifications for licensure by a corporation as a bail agent or bail enforcement agent; revising the authority of the commissioner to approve certain contracts relating to the state’s group insurance plan; 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 679A of NRS is hereby amended by adding thereto

1-2 a new section to read as follows:

1-3 The expiration or voluntary surrender of a license or certificate issued

1-4 pursuant to the provisions of this code does not:

1-5 1. Prohibit the commissioner from initiating or continuing a

1-6 disciplinary proceeding against the holder of the license or certificate; or

2-1 2. Prevent the imposition or collection of any fine or penalty

2-2 authorized pursuant to the provisions of this code against the holder of

2-3 the license or certificate.

2-4 Sec. 2. NRS 679B.190 is hereby amended to read as follows:

2-5 679B.190 1. The commissioner shall carefully preserve in the

2-6 division and in permanent form all papers and records relating to the

2-7 business and transactions of the division and shall hand them over to his

2-8 successor in office.

2-9 2. Except as otherwise provided in subsections 3, 5 and 6 , [and] other

2-10 provisions of this code and NRS 616B.015, the papers and records must be

2-11 open to public inspection.

2-12 3. Any records or information in the possession of the division related

2-13 to an investigation [or examination] conducted by the commissioner is

2-14 confidential [for the period of the investigation or examination] unless:

2-15 (a) The commissioner releases, in the manner that he deems appropriate,

2-16 all or any part of the records or information for public inspection after

2-17 determining that the release of the records or information:

2-18 (1) Will not harm his investigation [or examination] or the person

2-19 who is being investigated ; [or examined;] or

2-20 (2) Serves the interests of a policyholder, the shareholders of the

2-21 insurer or the public; or

2-22 (b) A court orders the release of the records or information after

2-23 determining that the production of the records or information will not

2-24 damage any investigation being conducted by the commissioner.

2-25 4. The commissioner may destroy unneeded or obsolete records and

2-26 filings in the division in accordance with provisions and procedures

2-27 applicable in general to administrative agencies of this state.

2-28 5. The commissioner may classify as confidential certain records and

2-29 information obtained from a governmental agency or other sources upon

2-30 the express condition that they remain confidential.

2-31 6. All information and documents in the possession of the division or

2-32 any of its employees which are related to cases or matters under

2-33 investigation [or examination] by the commissioner or his staff are

2-34 confidential for the [entire] period of the investigation [or examination] and

2-35 may not be made public unless the commissioner finds the existence of an

2-36 imminent threat of harm to the safety or welfare of the policyholder,

2-37 shareholders or the public and determines that the interests of the

2-38 policyholder, shareholders or the public will be served by publication

2-39 thereof, in which event he may make a record public or publish all or any

2-40 part of the record in any manner he deems appropriate.

3-1 Sec. 3. NRS 679B.440 is hereby amended to read as follows:

3-2 679B.440 1. The commissioner may require that reports submitted

3-3 pursuant to NRS 679B.430 include, without limitation, information

3-4 regarding:

3-5 (a) Liability insurance provided to:

3-6 (1) Governmental agencies and political subdivisions of this state,

3-7 reported separately for:

3-8 (I) Cities and towns;

3-9 (II) School districts; and

3-10 (III) Other political subdivisions;

3-11 (2) Public officers;

3-12 (3) Establishments where alcoholic beverages are sold;

3-13 (4) Facilities for the care of children;

3-14 (5) Labor, fraternal or religious organizations; and

3-15 (6) Officers or directors of organizations formed pursuant to Title 7

3-16 of NRS, reported separately for nonprofit entities and entities organized for

3-17 profit;

3-18 (b) Liability insurance for:

3-19 (1) Defective products;

3-20 (2) Medical malpractice;

3-21 (3) Malpractice of attorneys;

3-22 (4) Malpractice of architects and engineers; and

3-23 (5) Errors and omissions by other professionally qualified persons;

3-24 [and]

3-25 (c) Vehicle insurance, reported separately for:

3-26 (1) Private vehicles;

3-27 (2) Commercial vehicles;

3-28 (3) Liability insurance; and

3-29 (4) Insurance for property damage [.] ; and

3-30 (d) Workers’ compensation insurance.

3-31 2. The commissioner may require that the report include, without

3-32 limitation, information specifically pertaining to this state or to an insurer in

3-33 its entirety, in the aggregate or by type of insurance, and for a previous or

3-34 current year, regarding:

3-35 (a) Premiums directly written;

3-36 (b) Premiums directly earned;

3-37 (c) Number of policies issued;

3-38 (d) Net investment income, using appropriate estimates when necessary;

3-39 (e) Losses paid;

3-40 (f) Losses incurred;

3-41 (g) Loss reserves, including:

3-42 (1) Losses unpaid on reported claims; and

3-43 (2) Losses unpaid on incurred but not reported claims;

4-1 (h) Number of claims, including:

4-2 (1) Claims paid; and

4-3 (2) Claims that have arisen but are unpaid;

4-4 (i) Expenses for adjustment of losses, including allocated and

4-5 unallocated losses;

4-6 (j) Net underwriting gain or loss;

4-7 (k) Net operation gain or loss, including net investment income; and

4-8 (l) Any other information requested by the commissioner.

4-9 3. The commissioner may also obtain, based upon an insurer in its

4-10 entirety, information regarding:

4-11 (a) Recoverable federal income tax;

4-12 (b) Net unrealized capital gain or loss; and

4-13 (c) All other expenses not included in subsection 2.

4-14 Sec. 4. NRS 680B.010 is hereby amended to read as follows:

4-15 680B.010 The commissioner shall collect in advance and receipt for,

4-16 and persons so served must pay to the commissioner, fees and

4-17 miscellaneous charges as follows:

4-18 1. Insurer’s certificate of authority:

4-19 (a) Filing initial application $2,450

4-20 (b) Issuance of certificate:

4-21 (1) For any one kind of insurance as defined in NRS

4-22 681A.010 to 681A.080, inclusive 283

4-23 (2) For two or more kinds of insurance as so defined 578

4-24 (3) For a reinsurer 2,450

4-25 (c) Each annual continuation of a certificate 2,450

4-26 (d) Reinstatement pursuant to NRS 680A.180, 50 percent of

4-27 the annual continuation fee otherwise required.

4-28 (e) Registration of additional title pursuant to NRS 680A.240 50

4-29 (f) Annual renewal of the registration of additional title

4-30 pursuant to NRS 680A.240 25

4-31 2. Charter documents, other than those filed with an

4-32 application for a certificate of authority. Filing amendments to

4-33 articles of incorporation, charter, bylaws, power of attorney and

4-34 other constituent documents of the insurer, each document $10

4-35 3. Annual statement or report. For filing annual statement or

4-36 report $25

4-37 4. Service of process:

4-38 (a) Filing of power of attorney $5

4-39 (b) Acceptance of service of process 30

4-40 5. Agents’ licenses, appointments and renewals:

4-41 (a) Resident agents and nonresident agents qualifying under

4-42 subsection 3 of NRS 683A.340:

4-43 (1) Application and license $78

5-1 (2) Appointment by each insurer $5

5-2 (3) Triennial renewal of each license 78

5-3 (4) Temporary license 10

5-4 (b) Other nonresident agents:

5-5 (1) Application and license 138

5-6 (2) Appointment by each insurer 25

5-7 (3) Triennial renewal of each license 138

5-8 6. Brokers’ licenses and renewals:

5-9 (a) Resident brokers and nonresident brokers qualifying under

5-10 subsection 3 of NRS 683A.340:

5-11 (1) Application and license $78

5-12 (2) Triennial renewal of each license 78

5-13 (b) Other nonresident brokers:

5-14 (1) Application and license 258

5-15 (2) Triennial renewal of each license 258

5-16 (c) [Surplus] Resident surplus lines brokers:

5-17 (1) Application and license 78

5-18 (2) Triennial renewal of each license 78

5-19 (d) Nonresident surplus lines brokers:

5-20 (1) Application and license 258

5-21 (2) Triennial renewal of each license 258

5-22 7. Solicitors’ licenses, appointments and renewals:

5-23 (a) Application and license $78

5-24 (b) Triennial renewal of each license 78

5-25 (c) Initial appointment 5

5-26 8. Managing general agents’ licenses, appointments and

5-27 renewals:

5-28 (a) Resident managing general agents:

5-29 (1) Application and license $78

5-30 (2) Initial appointment, each insurer 5

5-31 (3) Triennial renewal of each license 78

5-32 (b) Nonresident managing general agents:

5-33 (1) Application and license 138

5-34 (2) Initial appointment, each insurer 25

5-35 (3) Triennial renewal of each license 138

5-36 9. Adjusters’ licenses and renewals:

5-37 (a) Independent and public adjusters:

5-38 (1) Application and license $78

5-39 (2) Triennial renewal of each license 78

5-40 (b) Associate adjusters:

5-41 (1) Application and license 78

5-42 (2) Initial appointment 5

5-43 (3) Triennial renewal of each license 78

6-1 10. Licenses and renewals for appraisers of physical damage

6-2 to motor vehicles:

6-3 (a) Application and license $78

6-4 (b) Triennial renewal of each license 78

6-5 11. Additional title and property insurers pursuant to NRS

6-6 680A.240:

6-7 (a) Original registration $50

6-8 (b) Annual renewal 25

6-9 12. Insurance vending machines:

6-10 (a) Application and license, for each machine $78

6-11 (b) Triennial renewal of each license 78

6-12 13. Permit for solicitation for securities:

6-13 (a) Application for permit $100

6-14 (b) Extension of permit 50

6-15 14. Securities salesmen for domestic insurers:

6-16 (a) Application and license $25

6-17 (b) Annual renewal of license 15

6-18 15. Rating organizations:

6-19 (a) Application and license $500

6-20 (b) Annual renewal 500

6-21 16. Certificates and renewals for administrators licensed

6-22 pursuant to chapter 683A of NRS:

6-23 (a) Resident administrators:

6-24 (1) Application and certificate of registration $78

6-25 (2) Triennial renewal 78

6-26 (b) Nonresident administrators:

6-27 (1) Application and certificate of registration 138

6-28 (2) Triennial renewal 138

6-29 17. For copies of the insurance laws of Nevada, a fee which

6-30 is not less than the cost of producing the copies.

6-31 18. Certified copies of certificates of authority and licenses

6-32 issued pursuant to the insurance code $10

6-33 19. For copies and amendments of documents on file in the

6-34 division, a reasonable charge fixed by the commissioner,

6-35 including charges for duplicating or amending the forms and for

6-36 certifying the copies and affixing the official seal.

6-37 20. Letter of clearance for an agent or broker $10

6-38 21. Certificate of status as a licensed agent or broker $10

6-39 22. Licenses, appointments and renewals for bail agents:

6-40 (a) Application and license $78

6-41 (b) Initial appointment by each surety insurer 5

6-42 (c) Triennial renewal of each license 78

6-43 23. Licenses and renewals for bail enforcement agents:

7-1 (a) Application and license $78

7-2 (b) Triennial renewal of each license 78

7-3 24. Licenses, appointments and renewals for general bail

7-4 agents:

7-5 (a) Application and license $78

7-6 (b) Initial appointment by each insurer 5

7-7 (c) Triennial renewal of each license $78

7-8 25. Licenses and renewals for bail solicitors:

7-9 (a) Application and license $78

7-10 (b) Triennial renewal of each license 78

7-11 26. Licenses and renewals for title agents and escrow

7-12 officers:

7-13 (a) Resident title agents and escrow officers:

7-14 (1) Application and license $78

7-15 (2) Triennial renewal of each license 78

7-16 (b) Nonresident title agents and escrow officers:

7-17 (1) Application and license 138

7-18 (2) Triennial renewal of each license 138

7-19 (c) Change in name or location of business or in association 10

7-20 27. Certificate of authority and renewal for a seller of

7-21 prepaid funeral contracts $78

7-22 28. Licenses and renewals for agents for prepaid funeral

7-23 contracts:

7-24 (a) Resident agents:

7-25 (1) Application and license $78

7-26 (2) Triennial renewal of each license 78

7-27 (b) Nonresident agents:

7-28 (1) Application and license 138

7-29 (2) Triennial renewal of each license 138

7-30 29. Licenses, appointments and renewals for agents for

7-31 fraternal benefit societies:

7-32 (a) Resident agents:

7-33 (1) Application and license $78

7-34 (2) Appointment 5

7-35 (3) Triennial renewal of each license 78

7-36 (b) Nonresident agents:

7-37 (1) Application and license 138

7-38 (2) Triennial renewal of each license 138

7-39 30. Reinsurance intermediary broker or manager:

7-40 (a) Resident agents:

7-41 (1) Application and license $78

7-42 (2) Triennial renewal of each license 78

7-43 (b) Nonresident agents:

8-1 (1) Application and license $138

8-2 (2) Triennial renewal of each license 138

8-3 31. Agents for and sellers of prepaid burial contracts:

8-4 (a) Resident agents and sellers:

8-5 (1) Application and certificate or license $78

8-6 (2) Triennial renewal 78

8-7 (b) Nonresident agents and sellers:

8-8 (1) Application and certificate or license $138

8-9 (2) Triennial renewal 138

8-10 32. Risk retention groups:

8-11 (a) Initial registration and review of an application $2,450

8-12 (b) Each annual continuation of a certificate of registration 2,450

8-13 33. Required filing of forms:

8-14 (a) For rates and policies $25

8-15 (b) For riders and endorsements 10

8-16 Sec. 5. NRS 681B.290 is hereby amended to read as follows:

8-17 681B.290 1. [On] Except as otherwise provided in subsection 3, on

8-18 or before March 1 of each year, each domestic insurer, and each foreign

8-19 insurer domiciled in a state which does not have requirements for reporting

8-20 risk-based capital, that transacts property, casualty, life or health insurance

8-21 in this state shall prepare and submit to the commissioner, and to each

8-22 person designated by the commissioner, a report of the level of the risk-

8-23 based capital of the insurer as of the end of the immediately preceding

8-24 calendar year. The report must be in such form and contain such

8-25 information as required by the regulations adopted by the commissioner

8-26 pursuant to this section.

8-27 2. The commissioner shall adopt regulations concerning the amount of

8-28 risk-based capital required to be maintained by each insurer licensed to do

8-29 business in this state that is transacting property, casualty, life or health

8-30 insurance in this state. The regulations must be consistent with the

8-31 instructions for reporting risk-based capital adopted by the National

8-32 Association of Insurance Commissioners, as those instructions existed on

8-33 January 1, 1997. If the instructions are amended, the commissioner may

8-34 amend the regulations to maintain consistency with the instructions if he

8-35 determines that the amended instructions are appropriate for use in this

8-36 state.

8-37 3. The commissioner may exempt from the provisions of this section

8-38 a domestic insurer who:

8-39 (a) Does not transact insurance in any other state; and

8-40 (b) Does not assume reinsurance that is more than 5 percent of the

8-41 direct premiums written by the insurer.

9-1 Sec. 5.2. NRS 682A.100 is hereby amended to read as follows:

9-2 682A.100 1. An insurer may invest in preferred or guaranteed stocks

9-3 or shares of any solvent institution existing under the laws of the United

9-4 States of America, Canada or Mexico, or of any state or province thereof, if

9-5 all of the prior obligations and prior preferred stocks, if any, of [such] the

9-6 institution at the date of acquisition of the investment by the insurer are

9-7 eligible as investments under this chapter and if the net earnings of [such]

9-8 the institution available for its fixed charges during either of the last 2 years

9-9 have been, and during each of the last 5 years have averaged, not less than

9-10 1 1/2 times the sum of its average annual fixed charges, if any, its average

9-11 annual maximum contingent interest, if any, and its average annual

9-12 preferred dividend requirements. For the purposes of this section , such

9-13 computation [shall refer to] must be based on the fiscal years immediately

9-14 preceding the date of acquisition of the investment by the insurer, and the

9-15 term "preferred dividend [requirement"] requirements" shall be deemed to

9-16 mean cumulative or noncumulative dividends, whether paid or not.

9-17 2. No insurer [shall] may invest in any such preferred or guaranteed

9-18 stocks in an amount in excess of [10] 35 percent of any issue [or] of such

9-19 guaranteed or preferred stocks or, subject to subsection 1 of NRS

9-20 682A.050 , [(diversification),] more than an amount equal to 10 percent of

9-21 the insurer’s admitted assets in any one issue.

9-22 Sec. 5.4. NRS 682A.110 is hereby amended to read as follows:

9-23 682A.110 An insurer may invest up to [25] 35 percent of its assets in

9-24 nonassessable (except as to bank or trust company stocks, and except for

9-25 taxes) common stocks, other than insurance stocks, of any solvent

9-26 corporation organized and existing under the laws of the United States of

9-27 America, Canada or Mexico, or of any state or province thereof, if [such]

9-28 that corporation has had net earnings available for dividends on such stock

9-29 in each of the 5 fiscal years next preceding acquisition by the insurer. If the

9-30 issuing corporation has not been in legal existence for the whole of [such]

9-31 the 5 fiscal years , but was formed as a consolidation or merger of two or

9-32 more businesses of which at least one was in operation on a date 5 years

9-33 [prior to] before the investment, the test of eligibility of its common stock

9-34 [under] pursuant to this section [shall] must be based upon consolidated

9-35 pro forma statements of the predecessor or constituent institutions.

9-36 Sec. 5.6. NRS 682A.130 is hereby amended to read as follows:

9-37 682A.130 1. An insurer may invest in the stock of its subsidiary

9-38 insurance corporation formed or acquired by it, or in the stock of its

9-39 subsidiary business corporation or corporations formed and engaged solely

9-40 in any one or more of the following businesses:

9-41 (a) In any business necessary and incidental to the convenient operation

9-42 of the insurer’s insurance business or to the administration of any of its

9-43 lawful affairs;

10-1 (b) Providing any actuarial, computer, data processing, accounting,

10-2 claims, appraisal, collection, sales, loss prevention or safety engineering

10-3 and similar services;

10-4 (c) Real property management and development;

10-5 (d) Premium financing;

10-6 (e) Financing of agents of the insurer;

10-7 (f) Acting as investment adviser and principal underwriter or investment

10-8 adviser or principal underwriter of a management company or management

10-9 companies (mutual funds), registered as such under the Investment

10-10 Company Act of 1940;

10-11 (g) Financial and investment counseling services;

10-12 (h) Administration of self-insurance plans;

10-13 (i) Administration of self-insured pension and similar plans, or the self-

10-14 insured portions of such plans;

10-15 (j) Securities broker-dealer;

10-16 (k) Escrow services; [or]

10-17 (l) Trust services with respect to [funds] money payable or paid by it

10-18 under its insurance contracts [.

10-19 2. For the purposes of this section a "subsidiary" is a corporation of

10-20 which the insurer owns sufficient stock to give it effective control.

10-21 3.] ;

10-22 (m) A bank, thrift company, savings and loan association, or credit

10-23 union; or

10-24 (n) An insurance agency.

10-25 2. All of the insurer’s investments under this section shall be deemed to

10-26 be common stocks for the purposes of the [25-percent-of-assets] limitation

10-27 imposed by NRS 682A.110.

10-28 3. For the purposes of this section, a "subsidiary" is a corporation of

10-29 which the insurer owns sufficient stock to give it effective control.

10-30 Sec. 5.8. NRS 682A.190 is hereby amended to read as follows:

10-31 682A.190 An insurer may invest in share or savings accounts of

10-32 savings and loan associations, or in savings accounts of banks, and in any

10-33 one such institution only to the extent that the investment is insured . [by

10-34 the Federal Deposit Insurance Corporation.]

10-35 Sec. 6. Chapter 683A of NRS is hereby amended by adding thereto the

10-36 provisions set forth as sections 7 to 16, inclusive, of this act.

10-37 Sec. 7. As used in NRS 683A.085 to 683A.0893, inclusive, and

10-38 sections 7 to 16, inclusive, of this act, unless the context otherwise

10-39 requires, the words and terms defined in sections 8 to 11, inclusive, of

10-40 this act have the meanings ascribed to them in those sections.

10-41 Sec. 8. "Affiliate" has the meaning ascribed to it in NRS 692C.030.

10-42 Sec. 9. "Control" has the meaning ascribed to it in NRS 692C.050.

11-1 Sec. 10. "Insurer" includes, without limitation:

11-2 1. An insurance company licensed pursuant to the provisions of this

11-3 code;

11-4 2. A prepaid limited health service organization that has been issued

11-5 a certificate of authority pursuant to chapter 695F of NRS;

11-6 3. A health maintenance organization that has been issued a

11-7 certificate of authority pursuant to chapter 695C of NRS;

11-8 4. A multiple employer welfare arrangement as defined in 29 U.S.C.

§ 1002;

11-9 5. An employer for whom a program of self-insurance is

11-10 administered by an administrator; and

11-11 6. An organization for dental care that has been issued a certificate

11-12 of authority pursuant to chapter 695D of NRS.

11-13 Sec. 11. "Underwrite" includes, without limitation:

11-14 1. Accepting applications for insurance coverage in accordance with

11-15 the written rules of an insurer;

11-16 2. Planning and coordinating a program of insurance; and

11-17 3. Procuring bonds and excess insurance.

11-18 Sec. 12. The commissioner:

11-19 1. Shall suspend or revoke the certificate of registration of an

11-20 administrator if the commissioner has determined, after notice and a

11-21 hearing, that the administrator:

11-22 (a) Is in an unsound financial condition;

11-23 (b) Uses methods or practices in the conduct of his business that are

11-24 hazardous or injurious to insured persons or members of the general

11-25 public; or

11-26 (c) Has failed to pay any judgment against him in this state within 60

11-27 days after the judgment became final.

11-28 2. May suspend or revoke the certificate of registration of an

11-29 administrator if the commissioner determines, after notice and a hearing,

11-30 that the administrator:

11-31 (a) Has willfully violated or failed to comply with any provision of this

11-32 code, any regulation adopted pursuant to this code or any order of the

11-33 commissioner;

11-34 (b) Has refused to be examined by the commissioner or has refused to

11-35 produce accounts, records or files for examination upon the request of

11-36 the commissioner;

11-37 (c) Has, without just cause, refused to pay claims or perform services

11-38 pursuant to his contracts or has, without just cause, caused persons to

11-39 accept less than the amount of money owed to them pursuant to the

11-40 contracts, or has caused persons to employ an attorney or bring a civil

11-41 action against him to receive full payment or settlement of claims;

12-1 (d) Is affiliated with, managed by or owned by another administrator

12-2 or an insurer who transacts insurance in this state without a certificate of

12-3 authority or a certificate of registration;

12-4 (e) Fails to comply with any of the requirements for a certificate of

12-5 registration;

12-6 (f) Has been convicted of, or has entered a plea of guilty or nolo

12-7 contendere to a felony, whether or not adjudication was withheld; or

12-8 (g) Has had his authority to act as an administrator in another state

12-9 limited, suspended or revoked.

12-10 3. May, upon notice to the administrator, suspend the certificate of

12-11 registration of the administrator pending a hearing if:

12-12 (a) The administrator is impaired or insolvent;

12-13 (b) A proceeding for receivership, conservatorship or rehabilitation

12-14 has been commenced against the administrator in any state; or

12-15 (c) The financial condition or the business practices of the

12-16 administrator represent an imminent threat to the public health, safety or

12-17 welfare of the residents of this state.

12-18 4. May, in addition to or in lieu of the suspension or revocation of

12-19 the certificate of registration of the administrator, impose a fine of

12-20 $2,000 for each act or violation.

12-21 Sec. 13. Each application for a certificate of registration as an

12-22 administrator must include or be accompanied by:

12-23 1. A financial statement that is certified by an officer of the applicant

12-24 and must include:

12-25 (a) The amount of money that the applicant expects to collect from or

12-26 disburse to residents of this state during the next calendar year;

12-27 (b) Financial information for the 90 days immediately preceding the

12-28 date the application was filed with the commissioner; and

12-29 (c) An income statement and balance sheet for the 2 years

12-30 immediately preceding the application that are prepared in accordance

12-31 with generally accepted accounting principles. The submission by the

12-32 applicant of his consolidated income statement and balance sheet does

12-33 not constitute compliance with the provisions of this paragraph.

12-34 2. The documents used to create the business association of the

12-35 administrator, including, without limitation, articles of incorporation,

12-36 articles of association, a partnership agreement, a trust agreement and a

12-37 shareholder agreement.

12-38 3. The documents used to regulate the internal affairs of the

12-39 administrator, including, without limitation, the bylaws, rules or

12-40 regulations of the administrator.

12-41 4. A certificate of registration issued pursuant to NRS 600.350 for a

12-42 trade name or trade-mark used by the administrator.

13-1 5. An organizational chart that identifies each person who directly or

13-2 indirectly controls the administrator and each affiliate of the

13-3 administrator.

13-4 6. A notarized affidavit from each person who manages or controls

13-5 the administrator, including, without limitation, each member of the

13-6 board of directors or board of trustees, each officer, partner, and member

13-7 of the business association of the administrator, and each shareholder of

13-8 the administrator who holds not less than 10 percent of the voting stock

13-9 of the administrator. The affidavit must include, without limitation:

13-10 (a) The personal history, business record and insurance experience of

13-11 the affiant;

13-12 (b) Whether the affiant has been investigated by any regulatory

13-13 authority or has had any license or certificate denied, suspended or

13-14 revoked in any state; and

13-15 (c) Any other information that the commissioner may require.

13-16 7. The complete name and address of each office of the

13-17 administrator, including, offices located outside this state.

13-18 8. A statement that sets forth whether the administrator has:

13-19 (a) Held a license or certificate to transact any kind of insurance in

13-20 this state or any other state and whether that license or certificate has

13-21 been refused, suspended or revoked;

13-22 (b) Been indebted to any person and, if so, the circumstances of that

13-23 debt; and

13-24 (c) Had an administrative agreement canceled and, if so, the

13-25 circumstances of that cancellation.

13-26 9. A statement that describes the business plan of the administrator.

13-27 The statement must include information:

13-28 (a) Concerning the number of persons on the staff of the

13-29 administrator and the activities proposed in this state or in any other

13-30 state.

13-31 (b) That demonstrates the capability of the administrator to provide a

13-32 sufficient number of experienced and qualified persons for the

13-33 processing of claims, the keeping of records and, if applicable,

13-34 underwriting.

13-35 10. If the applicant intends to solicit new or renewal business, proof

13-36 that the applicant employs or has contracted with an agent licensed in

13-37 this state to solicit and take applications. An applicant who intends to

13-38 solicit insurance contracts directly or to act as an insurance agent must

13-39 provide proof that he is licensed as an insurance agent in this state.

13-40 Sec. 14. 1. Except as otherwise provided by subsection 2, the

13-41 commissioner shall issue a certificate of registration as an administrator

13-42 to an applicant who:

13-43 (a) Submits an application on a form prescribed by the commissioner;

14-1 (b) Has complied with the provisions of section 13 of this act; and

14-2 (c) Pays the fee for the issuance of a certificate of registration

14-3 prescribed in NRS 680B.010.

14-4 2. The commissioner may refuse to issue a certificate of registration

14-5 as an administrator to an applicant if the commissioner determines that

14-6 the applicant or any person who has completed an affidavit pursuant to

14-7 subsection 6 of section 13 of this act:

14-8 (a) Is not competent to act as an administrator;

14-9 (b) Is not trustworthy or financially responsible;

14-10 (c) Does not have a good personal or business reputation;

14-11 (d) Has had a license or certificate to transact insurance denied for

14-12 cause, suspended or revoked in this state or any other state; or

14-13 (e) Has failed to comply with any provision of this chapter.

14-14 Sec. 15. 1. A certificate of registration as an administrator is valid

14-15 for 3 years after the date the commissioner issues the certificate to the

14-16 administrator.

14-17 2. An administrator may renew a certificate of registration if he

14-18 submits to the commissioner:

14-19 (a) An application on a form prescribed by the commissioner; and

14-20 (b) The fee for the renewal of the certificate of registration prescribed

14-21 in NRS 680B.010.

14-22 3. A certificate of registration that is suspended or revoked must be

14-23 surrendered immediately to the commissioner.

14-24 Sec. 16. Not later than March 1 of each year, each holder of a

14-25 certificate of registration as an administrator shall file a financial

14-26 statement with the commissioner on a form approved by the

14-27 commissioner.

14-28 Sec. 17. NRS 683A.025 is hereby amended to read as follows:

14-29 683A.025 1. Except as limited by this section, "administrator" means

14-30 a person who:

14-31 (a) [Collects] Directly or indirectly underwrites or collects charges or

14-32 premiums from or adjusts or settles claims of residents of this state or any

14-33 other state from within this state in connection with workers’

14-34 compensation insurance, life or health insurance coverage or annuities,

14-35 including coverage or annuities provided by an employer for his

14-36 employees;

14-37 (b) Administers [a trust under] an internal service fund pursuant to

14-38 NRS 287.010;

14-39 (c) Administers a program of self-insurance for an employer; [or]

14-40 (d) Administers a program which is funded by an employer and which

14-41 provides pensions, annuities, health benefits, death benefits or other similar

14-42 benefits for his employees [.] ; or

15-1 (e) Is an insurance company that is licensed to do business in this

15-2 state or is acting as an insurer with respect to a policy lawfully issued and

15-3 delivered in a state where the insurer is authorized to do business, if the

15-4 insurance company performs any act described in paragraphs (a) to (d),

15-5 inclusive, for or on behalf of another insurer.

15-6 2. "Administrator" does not include:

15-7 (a) An employee authorized to act on behalf of an administrator who

15-8 holds a certificate of registration from the commissioner.

15-9 (b) An employer acting on behalf of his employees or the employees of

15-10 a subsidiary or affiliated concern.

15-11 (c) A labor union acting on behalf of its members.

15-12 (d) [An] Except as otherwise provided in paragraph (e) of subsection

15-13 1, an insurance company licensed to do business in this state or acting as an

15-14 insurer with respect to a policy lawfully issued and delivered in a state in

15-15 which the insurer was authorized to do business.

15-16 (e) A life or health insurance agent or broker licensed in this state, when

15-17 his activities are limited to the sale of insurance.

15-18 (f) A creditor acting on behalf of his debtors with respect to insurance

15-19 covering a debt between the creditor and debtor.

15-20 (g) A trust and its trustees, agents and employees acting for it, if the trust

15-21 was established under the provisions of 29 U.S.C. § 186.

15-22 (h) A trust which is exempt from taxation under section 501(a) of the

15-23 Internal Revenue Code, 26 U.S.C. § 501(2), its trustees and employees, and

15-24 a custodian, his agents and employees acting under a custodial account

15-25 which meets the requirements of section 401(f) of the Internal Revenue

15-26 Code [.] , 26 U.S.C. § 401(f).

15-27 (i) A bank, credit union or other financial institution which is subject to

15-28 supervision by federal or state banking authorities.

15-29 (j) A company which issues credit cards, and which advances for and

15-30 collects premiums or charges from credit card holders who have authorized

15-31 it to do so, if the company does not adjust or settle claims.

15-32 (k) An attorney at law who adjusts or settles claims in the normal course

15-33 of his practice or employment, but who does not collect charges or

15-34 premiums in connection with life or health insurance coverage or with

15-35 annuities.

15-36 Sec. 18. NRS 683A.085 is hereby amended to read as follows:

15-37 683A.085 [1.] No person may act as [an administrator,] , offer to act

15-38 as or hold himself out to the public as an administrator, unless he has

15-39 obtained a certificate of registration as an administrator from the

15-40 commissioner [.

15-41 2. A certificate must be issued to an applicant who has made written

15-42 application therefor, giving any information which the commissioner

15-43 reasonably requires, and has paid the required fee, unless the commissioner

16-1 has determined, after notice and hearing, that the applicant is not

16-2 competent, trustworthy, financially responsible or of good personal and

16-3 business reputation.

16-4 3. No certificate may be issued to any person who, within the 5 years

16-5 immediately preceding his application, has had an insurance license

16-6 revoked or an application denied for cause.

16-7 4. The commissioner may revoke or suspend the certificate of any

16-8 administrator if he finds, after notice and hearing, that the administrator has

16-9 violated any provision of this Title or any regulation adopted under it.]

16-10 pursuant to section 14 of this act.

16-11 Sec. 19. NRS 683A.0857 is hereby amended to read as follows:

16-12 683A.0857 1. [Every] Each administrator shall file with the

16-13 commissioner a bond with an authorized surety in favor of the State of

16-14 Nevada, continuous in form and in an amount determined by the

16-15 commissioner of not less than [$50,000.] $100,000.

16-16 2. The commissioner shall establish schedules for the amount of the

16-17 bond required, based on the amount of money received and distributed by

16-18 an administrator.

16-19 3. The bond must inure to the benefit of any person damaged by any

16-20 fraudulent act or conduct of the administrator and must be conditioned

16-21 upon faithful accounting and application of all money coming into the

16-22 administrator’s possession in connection with his activities as an

16-23 administrator.

16-24 4. The bond remains in force until released by the commissioner or

16-25 canceled by the surety. Without prejudice to any liability previously

16-26 incurred, the surety may cancel the bond upon 90 days’ advance notice to

16-27 the administrator and the commissioner. An administrator’s certificate is

16-28 automatically suspended if he does not file with the commissioner a

16-29 replacement bond before the date of cancellation of the previous bond. A

16-30 replacement bond must meet all requirements of this section for the initial

16-31 bond.

16-32 Sec. 20. NRS 683A.086 is hereby amended to read as follows:

16-33 683A.086 1. No person may act as an administrator unless he has

16-34 entered into a written agreement with an insurer, and the written agreement

16-35 contains provisions to effectuate the requirements contained in NRS

16-36 [683A.0867] 683A.087 to 683A.0883, inclusive, and section 1 of Senate

16-37 Bill No. 145 of this [act] session, and sections 12 to 16, inclusive, of this

16-38 act which apply to the duties of the administrator.

16-39 2. The written agreement must set forth:

16-40 (a) The duties the administrator will be required to perform on behalf

16-41 of the insurer; and

16-42 (b) The lines, classes or types of insurance that the administrator is

16-43 authorized to administer on behalf of the insurer.

17-1 3. A copy of an agreement entered into under the provisions of this

17-2 section must be retained in the records of the administrator and of the

17-3 insurer for a period of 5 years after the termination of the agreement.

17-4 [3.] 4. When a policy is issued to a trustee or trustees, a copy of the

17-5 trust agreement and amendments must be obtained by the administrator and

17-6 a copy forwarded to the insurer. Each agreement must be retained by the

17-7 administrator and [by] the insurer for a period of 5 years after the

17-8 termination of the policy.

17-9 [4.] 5. The commissioner may adopt regulations which specify the

17-10 functions an administrator may perform on behalf of an insurer.

17-11 6. The insurer or administrator may, upon written notice to the other

17-12 party to the agreement and to the commissioner, terminate the written

17-13 agreement for any cause specified in the agreement. The insurer may

17-14 suspend the authority of the administrator while any dispute regarding

17-15 the cause for termination is pending. The insurer shall perform any

17-16 obligations with respect to the policies affected by the agreement

17-17 regardless of any dispute with the administrator.

17-18 Sec. 21. NRS 683A.087 is hereby amended to read as follows:

17-19 683A.087 An administrator may advertise the insurance which he

17-20 administers only [with] after he receives the approval of the insurer who

17-21 underwrites the business involved.

17-22 Sec. 22. NRS 683A.0873 is hereby amended to read as follows:

17-23 683A.0873 1. Each administrator shall maintain at his principal

17-24 office adequate books and records of all transactions between himself, the

17-25 insurer and the insured. The books and records must be maintained in

17-26 accordance with prudent standards of recordkeeping for insurance and with

17-27 regulations of the commissioner for a period of 5 years after the transaction

17-28 to which they respectively relate. After the 5-year period the administrator

17-29 may remove the books and records from the state, store their contents on

17-30 microfilm or return them to the appropriate insurer.

17-31 2. The commissioner may examine, audit and inspect books and

17-32 records [kept by administrators] maintained by an administrator under the

17-33 provisions of this section [.] to carry out the provisions of NRS 679B.230

17-34 to 679B.300, inclusive.

17-35 3. The names and addresses of insured persons and any other material

17-36 which is in the books and records of an administrator are confidential

17-37 except when used in proceedings against the administrator.

17-38 4. The insurer may inspect and examine all books and records to the

17-39 extent necessary to fulfill all contractual obligations to insured persons,

17-40 subject to restrictions in the written agreement between the insurer and

17-41 administrator.

18-1 Sec. 23. NRS 683A.0877 is hereby amended to read as follows:

18-2 683A.0877 1. All insurance charges and premiums collected by an

18-3 administrator on behalf of an insurer and return premiums received from an

18-4 insurer are held by the administrator in a fiduciary capacity.

18-5 2. Money [shall] must be remitted within 15 days to the person or

18-6 persons entitled to it, or [shall] be deposited within 15 days in [a fiduciary

18-7 bank account] one or more fiduciary accounts established and maintained

18-8 by the administrator [within the state.] in a financial institution in this

18-9 state. The fiduciary accounts must be separate from the personal or

18-10 business accounts of the administrator.

18-11 3. If charges or premiums deposited in an account have been collected

18-12 for or on behalf of more than one insurer, the administrator shall cause the

18-13 [bank in which] financial institution where the fiduciary account is

18-14 maintained to record clearly the deposits and withdrawals from the account

18-15 on behalf of each insurer.

18-16 4. The administrator shall promptly obtain and keep copies of [all bank

18-17 account] the records of each fiduciary account and shall furnish any

18-18 insurer with copies of the records which pertain to him upon demand of the

18-19 insurer.

18-20 5. The administrator [may] shall not pay any claim by withdrawing

18-21 money from his fiduciary account [.] in which premiums or charges are

18-22 deposited.

18-23 6. Withdrawals [shall] must be made as provided in the agreement

18-24 between the insurer and the administrator for:

18-25 (a) Remittance to the insurer.

18-26 (b) Deposit in an account maintained in the name of the insurer.

18-27 (c) Transfer to and deposit in an account for the payment of claims.

18-28 (d) Payment to a group policyholder for remittance to the insurer

18-29 entitled to the money.

18-30 (e) Payment to the administrator of his commission, fees or charges.

18-31 (f) Remittance of return premiums to persons entitled to them.

18-32 7. The administrator shall maintain copies of all records relating to

18-33 deposits or withdrawals and, upon the request of an insurer, provide the

18-34 insurer with copies of those records.

18-35 Sec. 24. NRS 683A.088 is hereby amended to read as follows:

18-36 683A.088 Each claim paid by the administrator from [funds] money

18-37 collected for or on behalf of an insurer [shall] must be paid by a check or

18-38 draft upon and as authorized by the insurer.

18-39 Sec. 25. NRS 683A.0883 is hereby amended to read as follows:

18-40 683A.0883 1. The compensation paid to an administrator for his

18-41 services may be based upon premiums or charges collected, on number of

18-42 claims paid or processed or on [another] any other basis agreed upon by

18-43 the administrator and the insurer, except as provided in subsection 2.

19-1 2. Compensation paid to an administrator may not be based upon or

19-2 contingent upon :

19-3 (a) The claim experience of the policies [which he handles.] that he

19-4 handles; or

19-5 (b) The savings realized by the administrator by adjusting, settling or

19-6 paying the losses covered by an insurer.

19-7 Sec. 26. NRS 683A.0887 is hereby amended to read as follows:

19-8 683A.0887 1. Each administrator shall advise each insured, by means

19-9 of a written notice approved by the insurer, of the identity of and

19-10 relationship among the insurer, administrator and insured.

19-11 2. An administrator who seeks to collect premiums or charges shall

19-12 clearly [state] set forth in writing to the insured the amount of premium or

19-13 charge set by the insurer for the insurance coverage [.] and the reason for

19-14 the collection of the premium or charge. Each charge must be set forth

19-15 separately from the premium.

19-16 3. The administrator shall disclose to an insurer, in writing, all

19-17 charges, fees and commissions the administrator receives in connection

19-18 with the provision of administrative services for the insurer, including,

19-19 without limitation, the fees and commissions paid by insurers providing

19-20 reinsurance or excess of loss insurance.

19-21 Sec. 26.5. NRS 685A.070 is hereby amended to read as follows:

19-22 685A.070 1. A broker shall not knowingly place surplus lines

19-23 insurance with an insurer which is unsound financially or ineligible

19-24 pursuant to this section.

19-25 2. [No] Except as otherwise provided in this section, no insurer is

19-26 eligible for the acceptance of surplus lines risks pursuant to this chapter

19-27 unless it has surplus as to policyholders in an amount of not less than

19-28 $5,000,000 and, if an alien insurer, unless it has and maintains in a bank or

19-29 trust company which is a member of the United States Federal Reserve

19-30 System a trust fund established pursuant to terms reasonably adequate for

19-31 the protection of all of its policyholders in the United States in an amount

19-32 of not less than $1,500,000. Such a trust fund must not have an expiration

19-33 date which is at any time less than 5 years in the future, on a continuing

19-34 basis. In the case of:

19-35 (a) A group of insurers which includes individual unincorporated

19-36 insurers, such a trust fund must not be less than $100,000,000.

19-37 (b) A group of incorporated insurers under common administration,

19-38 such a trust fund must not be less than $100,000,000. The group of

19-39 incorporated insurers must:

19-40 (1) Operate under the supervision of the Department of Trade and

19-41 Industry of the United Kingdom;

19-42 (2) Possess aggregate policyholders surplus of $10,000,000,000,

19-43 which must consist of money in trust in an amount not less than the

20-1 assuming insurers’ liabilities attributable to insurance written in the United

20-2 States; and

20-3 (3) Maintain a joint trusteed surplus of which $100,000,000 must be

20-4 held jointly for the benefit of United States ceding insurers of any member

20-5 of the group.

20-6 (c) An insurance exchange created by the laws of a state, [such] the

20-7 insurance exchange shall have and maintain a trust fund [must not be] in

20-8 an amount of not less than $50,000,000 [.] or have a surplus as to

20-9 policyholders in an amount of not less than $50,000,000. If an insurance

20-10 exchange maintains money for the protection of all policyholders, each

20-11 syndicate shall maintain minimum capital and surplus of not less than

20-12 $5,000,000 and must qualify separately to be eligible for the acceptance of

20-13 surplus lines risks pursuant to this chapter.

20-14 The commissioner may require larger trust funds or surplus as to

20-15 policyholders than those set forth in this section if, in his judgment, the

20-16 volume of business being transacted or proposed to be transacted warrants

20-17 larger amounts.

20-18 3. No insurer is eligible to write surplus lines of insurance unless it has

20-19 established a reputation for financial integrity and satisfactory practices in

20-20 underwriting and handling claims. In addition, a foreign insurer must be

20-21 authorized in the state of its domicile to write the kinds of insurance which

20-22 it intends to write in Nevada.

20-23 4. The commissioner may from time to time compile or approve a list

20-24 of all surplus lines insurers deemed by him to be eligible currently, and may

20-25 mail a copy of the list to each broker at his office last of record with the

20-26 commissioner. To be placed on the list, a surplus lines insurer must file an

20-27 application with the commissioner. The application must be accompanied

20-28 by a nonrefundable fee of $2,450. This subsection does not require the

20-29 commissioner to determine the actual financial condition or claims

20-30 practices of any unauthorized insurer. The status of eligibility, if granted by

20-31 the commissioner, indicates only that the insurer appears to be sound

20-32 financially and to have satisfactory claims practices, and that the

20-33 commissioner has no credible evidence to the contrary. While any such list

20-34 is in effect, the broker shall restrict to the insurers so listed all surplus lines

20-35 business placed by him.

20-36 Sec. 27. NRS 685A.120 is hereby amended to read as follows:

20-37 685A.120 1. No person in this state may act as, hold himself out as,

20-38 or be a surplus lines broker with respect to subjects of insurance resident,

20-39 located or to be performed in this state or elsewhere unless he is licensed as

20-40 such by the commissioner pursuant to this chapter.

20-41 2. Any person who has been licensed by this state as a [resident] broker

20-42 for general lines for at least 6 months , or has been licensed in another state

20-43 as a surplus lines broker for at least 1 year and continues to be licensed in

21-1 that state, and who is deemed by the commissioner to be competent and

21-2 trustworthy with respect to the handling of surplus lines may be licensed as

21-3 a surplus lines broker upon:

21-4 (a) Application for a license and payment of the applicable fee for a

21-5 license and a fee of $15 for deposit in the insurance recovery account

21-6 created by NRS 679B.305;

21-7 (b) Submitting the statement required pursuant to NRS 685A.127; and

21-8 (c) Passing any examination prescribed by the commissioner on the

21-9 subject of surplus lines.

21-10 3. An application for a license must be submitted to the commissioner

21-11 on a form designated and furnished by him. The application must include

21-12 the social security number of the applicant.

21-13 4. A license issued pursuant to this chapter continues in force for 3

21-14 years unless it is suspended, revoked or otherwise terminated. The license

21-15 may be renewed upon submission of the statement required pursuant to

21-16 NRS 685A.127 and payment of the applicable fee for renewal and a fee of

21-17 $15 for deposit in the insurance recovery account created by NRS

21-18 679B.305 to the commissioner on or before the last day of the month in

21-19 which the license is renewable.

21-20 5. A license which is not renewed expires at midnight on the last day

21-21 specified for its renewal. The commissioner may accept a request for

21-22 renewal received by him within 30 days after the expiration of the license if

21-23 the request is accompanied by the statement required pursuant to NRS

21-24 685A.127, a fee for renewal of 150 percent of the fee otherwise required

21-25 and a fee of $15 for deposit in the insurance recovery account created by

21-26 NRS 679B.305.

21-27 Sec. 28. NRS 685A.140 is hereby amended to read as follows:

21-28 685A.140 1. In addition to other grounds therefor, the commissioner

21-29 may suspend or revoke any surplus lines broker’s license:

21-30 (a) If the broker fails to file the annual statement or to remit the tax as

21-31 required by NRS 685A.170 and 685A.180;

21-32 (b) If the broker fails to maintain an office in this state [,] or in the state

21-33 where he was issued a license as a resident broker, or to keep the records,

21-34 or to allow the commissioner to examine his records as required by this

21-35 chapter, or if he removes his records from the state; or

21-36 (c) If the broker places a surplus lines coverage in an insurer other than

21-37 as authorized under this chapter.

21-38 2. Upon suspending or revoking the broker’s surplus lines license the

21-39 commissioner may also suspend or revoke all other licenses of or as to the

21-40 same individual under this code.

21-41 Sec. 29. NRS 685A.160 is hereby amended to read as follows:

21-42 685A.160 1. Each broker shall keep in his office [in this state] a full

21-43 and true record of each surplus lines coverage procured by him, including a

22-1 copy of each daily report, if any, a copy of each certificate of insurance

22-2 issued by him, and such of the following items as may be applicable:

22-3 (a) [Amount] The amount of the insurance;

22-4 (b) [Gross] The gross premium charged;

22-5 (c) [Return] The return premium paid, if any;

22-6 (d) [Rate] The rate of premium charged upon the several items of

22-7 property;

22-8 (e) [Effective] The effective date of the contract, and the terms thereof;

22-9 (f) [Name] The name and address of each insurer on the direct risk and

22-10 the proportion of the entire risk assumed by [such] that insurer if less than

22-11 the entire risk;

22-12 (g) [Name] The name and address of the insured;

22-13 (h) [Brief] A brief general description of the property or risk insured and

22-14 where located or to be performed; and

22-15 (i) [Other] Any other information as may be required by the

22-16 commissioner.

22-17 2. The record [shall] must not be removed from [this state and shall]

22-18 the office of the broker and must be open to examination by the

22-19 commissioner or his representative at all times within 5 years after issuance

22-20 of the coverage to which it relates.

22-21 Sec. 30. NRS 686A.130 is hereby amended to read as follows:

22-22 686A.130 1. No property, casualty, surety or title insurer or

22-23 underwritten title company or any employee or representative thereof, and

22-24 no broker, agent or solicitor may pay, allow or give, or offer to pay, allow

22-25 or give, directly or indirectly, as an inducement to insurance, or after

22-26 insurance has been effected, any rebate, discount, abatement, credit or

22-27 reduction of the premium named in a policy of insurance, or any special

22-28 favor or advantage in the dividends or other benefits to accrue thereon, or

22-29 any valuable consideration or inducement whatever, not specified or

22-30 provided for in the policy, except to the extent provided for in an

22-31 applicable filing with the commissioner.

22-32 2. No title insurer or underwritten title company may:

22-33 (a) Pay, directly or indirectly, to the insured or any person acting as

22-34 agent, representative, attorney or employee of the owner, lessee,

22-35 mortgagee, existing or prospective, of the real property or interest therein

22-36 which is the subject matter of title insurance or as to which a service is to

22-37 be performed, any commission , rebate or part of its fee or charges or other

22-38 consideration as inducement or compensation for the placing of any order

22-39 for a title insurance policy or for performance of any escrow or other

22-40 service by the insurer or underwritten title company with respect thereto; or

22-41 (b) Issue any policy or perform any service in connection with which it

22-42 or any agent or other person has paid or contemplates paying any

22-43 commission, rebate or inducement in violation of this section.

23-1 3. No insured named in a policy or any employee of [such] that insured

23-2 may knowingly receive or accept, directly or indirectly, any such rebate,

23-3 discount, abatement, credit or reduction of premium, or any such special

23-4 favor or advantage or valuable consideration or inducement.

23-5 4. No such insurer may make or permit any unfair discrimination

23-6 between insured or property having like insuring or risk characteristics, in

23-7 the premium or rates charged for insurance, or in the dividends or other

23-8 benefits payable thereon, or in any other of the terms and conditions of

23-9 insurance.

23-10 5. No casualty insurer may make or permit any unfair discrimination

23-11 between persons legally qualified to provide a particular service, in the

23-12 amount of the fee or charge for that service payable as a benefit under any

23-13 policy or contract of casualty insurance.

23-14 6. [Nothing in this section prohibits:] The provisions of this section do

23-15 not prohibit:

23-16 (a) The payment of commissions or other compensation to licensed

23-17 agents, brokers or solicitors.

23-18 (b) The extension of credit to an insured for the payment of any

23-19 premium and for which credit a reasonable rate of interest is charged and

23-20 collected.

23-21 (c) Any insurer from allowing or returning to its participating

23-22 policyholders, members or subscribers, dividends, savings or unabsorbed

23-23 premium deposits.

23-24 [As to title insurance, nothing in this section prohibits]

23-25 (d) With respect to title insurance, bulk rates or special rates for

23-26 customers of prescribed classes if [such] the bulk or special rates are

23-27 provided for in the [currently] effective schedule of fees and charges of the

23-28 title insurer or underwritten title company.

23-29 7. [This section does] The provisions of this section do not apply to

23-30 wet marine and transportation insurance.

23-31 Sec. 31. NRS 686C.035 is hereby amended to read as follows:

23-32 686C.035 1. This chapter does not provide coverage for:

23-33 (a) Any portion of a policy or contract not guaranteed by the insurer, or

23-34 under which the risk is borne by the [policyholder.] holder of the policy or

23-35 contract.

23-36 (b) Any policy or contract of reinsurance unless assumption certificates

23-37 have been issued [.] pursuant to that policy or contract.

23-38 (c) Any portion of a policy or contract to the extent that the rate of

23-39 interest on which it is based:

23-40 (1) When averaged over the period of 4 years before the date [that]

23-41 on which the association becomes obligated with respect to the policy or

23-42 contract, or averaged for the period since the policy or contract was issued

23-43 if it was issued less than 4 years before the association became obligated,

24-1 exceeds the rate of interest determined by subtracting 2 percentage points

24-2 from Moody’s Corporate Bond Yield Average averaged for the same

24-3 period; and

24-4 (2) On or after the date on which the association becomes obligated

24-5 with respect to the policy or contract, exceeds the rate of interest

24-6 determined by subtracting 3 percentage points from the most recent

24-7 Moody’s Corporate Bond Yield Average.

24-8 (d) Any portion of a policy or contract issued to a plan or program of

24-9 an employer, association or [similar entity] other person to provide life ,

24-10 [or] health or annuity benefits [or annuities] to its employees , [or]

24-11 members or other persons to the extent that the plan or program is self-

24-12 funded or uninsured, including, but not limited to, benefits payable by an

24-13 employer, association or [similar entity] other person under:

24-14 (1) A [Multiple Employer Welfare Arrangement] multiple employer

24-15 welfare arrangement as defined in 29 U.S.C. § 1002;

24-16 (2) A minimum-premium group insurance plan;

24-17 (3) A stop-loss group insurance plan; or

24-18 (4) A contract for administrative services only.

24-19 (e) Any portion of a policy or contract to the extent that it provides for

24-20 dividends, credits for experience, voting rights or the payment of any fee

24-21 or allowance to any person, including the [policyholder,] holder of a

24-22 policy or contract, for services or administration connected with the policy

24-23 or contract.

24-24 (f) Any policy or contract issued in this state by a member insurer at a

24-25 time when the member insurer was not authorized to issue the policy or

24-26 contract [.] in this state.

24-27 (g) [Any certificate for an annuity or group annuity which is not issued

24-28 to or owned by a natural person, except to the extent of any annuity

24-29 guaranteed to a natural person by an insurer under the contract or certificate

24-30 except that annuities issued in connection with and for the purpose of

24-31 funding structured settlements of liability are covered policies.

24-32 (h) Any health or life insurance policy purchased by the Federal

24-33 Government, if no premium taxes are paid on such policies.

24-34 (i) Any annuity issued pursuant to subsection 8 of NRS 680A.070.] A

24-35 portion of a policy or contract to the extent that the assessments required

24-36 by NRS 686C.230 for the policy or contract are preempted by federal law.

24-37 (h) An obligation that does not arise under the written terms of a

24-38 policy or contract issued by the insurer.

24-39 (i) An unallocated annuity contract.

24-40 2. As used in this section, "Moody’s Corporate Bond Yield Average"

24-41 means the monthly average for corporate bonds published by Moody’s

24-42 Investors Service, Inc., or any successor average.

25-1 Sec. 32. NRS 687B.440 is hereby amended to read as follows:

25-2 687B.440 1. An insurer offering an umbrella policy to an individual

25-3 shall obtain a signed disclosure statement from the individual indicating

25-4 whether the umbrella policy includes uninsured or underinsured vehicle

25-5 coverage.

25-6 2. The disclosure statement for an umbrella policy that includes

25-7 uninsured or underinsured vehicle coverage must be on a form provided

25-8 by the commissioner or in substantially the following form:

25-9 UMBRELLA POLICY DISCLOSURE STATEMENT

25-10 UNINSURED/UNDERINSURED VEHICLE COVERAGE

25-11 ¨ Your Umbrella Policy does provide coverage in excess of the

25-12 limits of the uninsured/underinsured vehicle coverage in your primary

25-13 auto insurance only if the requirements for the uninsured/underinsured

25-14 vehicle coverage in your underlying auto insurance are maintained.

25-15 [The minimum uninsured/underinsured vehicle coverage in your

25-16 umbrella insurance policy is $……… . The limits of the

25-17 uninsured/underinsured vehicle coverage in your primary auto

25-18 insurance policy are $………. .] Your uninsured/underinsured

25-19 vehicle coverage provided by this umbrella policy is limited to

25-20 $……… .

25-21 I understand and acknowledge the above disclosure.

25-22

25-23 Insured Date

25-24 3. The disclosure statement for an umbrella policy that does not

25-25 include uninsured or underinsured vehicle coverage must be on a form

25-26 provided by the commissioner or in substantially the following form:

25-27 ¨ Your Umbrella Liability Policy does not provide any

25-28 uninsured/underinsured vehicle coverage.

25-29 I understand and acknowledge the above disclosure.

25-30

25-31 Insured Date

25-32 [3.] 4. As used in this section, "umbrella policy" means a policy that

25-33 protects a person against losses in excess of the underlying amount required

25-34 to be covered by other policies.

26-1 Sec. 33. NRS 689A.505 is hereby amended to read as follows:

26-2 689A.505 "Creditable coverage" means, with respect to a person,

26-3 health benefits or coverage provided pursuant to:

26-4 1. A group health plan;

26-5 2. A health benefit plan;

26-6 3. Part A or Part B of Title XVIII of the Social Security Act, 42 U.S.C.

§§ 1395c et seq., also known as Medicare;

26-7 4. Title XIX of the Social Security Act, 42 U.S.C. §§ 1396 et seq., also

26-8 known as Medicaid, other than coverage consisting solely of benefits under

26-9 section 1928 of that Title [;

26-10 5. Chapter 55 of Title 10, United States Code (] , 42 U.S.C § 1396s;

26-11 5. The Civilian Health and Medical Program of Uniformed Services

26-12 [(CHAMPUS));] , CHAMPUS, 10 U.S.C §§ 1071 et seq.;

26-13 6. A medical care program of the Indian Health Service or of a tribal

26-14 organization;

26-15 7. A state health benefit risk pool;

26-16 8. A health plan offered pursuant to [chapter 89 of Title 5, United

26-17 States Code (] the Federal Employees Health Benefits Program

26-18 [(FEHBP));] , FEHBP, 5 U.S.C. §§ 8901 et seq.;

26-19 9. A public health plan as defined in federal regulations authorized by

26-20 the Public Health Service Act, [section 2701(c)(1)(I), as amended by

26-21 Public Law 104-191; or] 42 U.S.C. §§ 201 et seq.;

26-22 10. A health benefit plan under section 5(e) of the Peace Corps Act ,

26-23 [(] 22 U.S.C. § 2504(e) [).] ;

26-24 11. A short-term health insurance policy; or

26-25 12. A blanket student accident and health insurance policy.

26-26 Sec. 34. NRS 689A.515 is hereby amended to read as follows:

26-27 689A.515 "Eligible person" means:

26-28 1. A person:

26-29 (a) Who, as of the date on which he seeks coverage pursuant to this

26-30 chapter, has an aggregate period of creditable coverage that is 18 months or

26-31 more;

26-32 (b) Whose most recent prior creditable coverage , other than coverage

26-33 under a short-term health insurance policy, was under a group health

26-34 plan, governmental plan, church plan or health insurance coverage offered

26-35 in connection with any such plan;

26-36 (c) Who is not eligible for coverage under a group health plan, Part A or

26-37 Part B of Title XVIII of the Social Security Act, 42 U.S.C. §§ 1395c et

26-38 seq., also known as Medicare, a state plan pursuant to Title XIX of the

26-39 Social Security Act, 42 U.S.C. §§ 1396 et seq., also known as Medicaid, or

26-40 any successor program, and who does not have any other health insurance

26-41 coverage;

27-1 (d) Whose most recent health insurance coverage within the period of

27-2 aggregate creditable coverage was not terminated because of a failure to

27-3 pay premiums or fraud;

27-4 (e) Who has exhausted his continuation of coverage under the

27-5 Consolidation Omnibus Budget Reconciliation Act of 1985 [,] Public Law

27-6 99-272, or under a similar state program, if any; and

27-7 (f) Who has not had a break of more than 63 consecutive days in his

27-8 creditable coverage.

27-9 2. A person whose most recent prior creditable coverage was under a

27-10 basic or standard health benefit plan and was not renewed by a carrier

27-11 who discontinued offering and renewing individual health benefit plans

27-12 in this state pursuant to NRS 689A.630.

27-13 3. Notwithstanding the provisions of paragraph (a) of subsection 1, a

27-14 newborn child or a child placed for adoption, if the child was enrolled

27-15 timely and would have otherwise met the requirements of an eligible person

27-16 as set forth in subsection 1.

27-17 Sec. 35. NRS 689A.540 is hereby amended to read as follows:

27-18 689A.540 1. "Health benefit plan" means a policy, contract,

27-19 certificate or agreement offered by a carrier to provide for, deliver payment

27-20 for, arrange for the payment of, pay for or reimburse any of the costs of

27-21 health care services. Except as otherwise provided in this section, the term

27-22 includes [short-term and] catastrophic health insurance policies [,] and a

27-23 policy that pays on a cost-incurred basis.

27-24 2. The term does not include:

27-25 (a) Coverage that is only for accident or disability income insurance, or

27-26 any combination thereof;

27-27 (b) Coverage issued as a supplement to liability insurance;

27-28 (c) Liability insurance, including general liability insurance and

27-29 automobile liability insurance;

27-30 (d) Workers’ compensation or similar insurance;

27-31 (e) Coverage for medical payments under a policy of automobile

27-32 insurance;

27-33 (f) Credit insurance;

27-34 (g) Coverage for on-site medical clinics; [and]

27-35 (h) Other similar insurance coverage specified in federal regulations

27-36 issued pursuant to Public Law 104-191 under which benefits for medical

27-37 care are secondary or incidental to other insurance benefits [.] ;

27-38 (i) Coverage under a short-term health insurance policy; and

27-39 (j) Coverage under a blanket student accident and health insurance

27-40 policy.

27-41 3. The term does not include the following benefits if the benefits are

27-42 provided under a separate policy, certificate or contract of insurance or are

27-43 otherwise not an integral part of a health benefit plan:

28-1 (a) Limited-scope dental or vision benefits;

28-2 (b) Benefits for long-term care, nursing home care, home health care or

28-3 community-based care, or any combination thereof; and

28-4 (c) Such other similar benefits as are specified in any federal regulations

28-5 adopted pursuant to the Health Insurance Portability and Accountability

28-6 Act of 1996, Public Law 104-191.

28-7 4. The term does not include the following benefits if the benefits are

28-8 provided under a separate policy, certificate or contract of insurance, there

28-9 is no coordination between the provision of the benefits and any exclusion

28-10 of benefits under any group health plan maintained by the same plan

28-11 sponsor, and [such] the benefits are paid for a claim without regard to

28-12 whether benefits are provided for such a claim under any group health plan

28-13 maintained by the same plan sponsor:

28-14 (a) Coverage that is only for a specified disease or illness; and

28-15 (b) Hospital indemnity or other fixed indemnity insurance.

28-16 5. The term does not include any of the following, if offered as a

28-17 separate policy, certificate or contract of insurance:

28-18 (a) Medicare supplemental health insurance as defined in section

28-19 1882(g)(1) of the Social Security Act, 42 U.S.C. § 1395ss, as that section

28-20 existed on July 16, 1997;

28-21 (b) Coverage supplemental to the coverage provided pursuant to

28-22 [chapter 55 of Title 10, United States Code (] the Civilian Health and

28-23 Medical Program of Uniformed Services [(CHAMPUS));] , CHAMPUS,

28-24 10 U.S.C. §§ 1071 et seq.; and

28-25 (c) Similar supplemental coverage provided under a group health plan.

28-26 Sec. 36. NRS 689A.650 is hereby amended to read as follows:

28-27 689A.650 1. An individual carrier is not required to provide

28-28 coverage to eligible persons pursuant to NRS 689A.640:

28-29 (a) During any period in which the commissioner determines that

28-30 requiring the individual carrier to provide such coverage would place the

28-31 individual carrier in a financially impaired condition.

28-32 (b) If the individual carrier elects not to offer any new coverage to any

28-33 [eligible] persons in this state. An individual carrier that elects not to offer

28-34 new coverage in accordance with this paragraph may maintain its existing

28-35 policies issued to [eligible] persons in this state, subject to the requirements

28-36 of NRS 689A.630.

28-37 2. An individual carrier that elects not to offer new coverage pursuant

28-38 to paragraph (b) of subsection 1 shall notify the commissioner forthwith of

28-39 that election and shall not thereafter write any new business to individuals

28-40 in this state for 5 years after the date of the notification.

29-1 Sec. 37. NRS 689A.660 is hereby amended to read as follows:

29-2 689A.660 An individual carrier shall not:

29-3 1. Impose on an eligible person who is covered under a basic or

29-4 standard health benefit plan any exclusion because of a preexisting

29-5 condition.

29-6 2. Modify a health benefit plan, with respect to an eligible person,

29-7 through riders, endorsements or otherwise, to restrict or exclude services

29-8 otherwise covered by the plan.

29-9 Sec. 38. NRS 689A.680 is hereby amended to read as follows:

29-10 689A.680 1. An individual carrier shall develop its rates for its

29-11 individual health benefit plans pursuant to NRS 689A.470 to 689A.740,

29-12 inclusive, based on rating characteristics. After any adjustments for rating

29-13 characteristics and design of benefits, the rate for any block of business for

29-14 an individual health benefit plan written on or after [July 16, 1997,]

29-15 January 1, 2000, must not exceed the rate for any other block of business

29-16 for an individual health benefit plan offered by the individual carrier by

29-17 more than [100] 50 percent. The rate for a block of business is equal to the

29-18 average rate charged to all the insureds in the block of business. In

29-19 determining whether the rate of a block of business complies with the

29-20 provisions of this subsection, any differences in rating factors between

29-21 blocks of business must be considered.

29-22 2. In determining the rating factors to establish premium rates for a

29-23 health benefit plan, an individual carrier shall not use characteristics other

29-24 than age, sex, occupation, geographic area, composition of the family of the

29-25 individual and health status.

29-26 3. If an individual carrier uses health status as a rating factor in

29-27 establishing premium rates, the highest factor associated with any

29-28 classification for health status may not exceed the lowest factor by more

29-29 than 75 percent.

29-30 4. For the purposes of this section, rating characteristics must not

29-31 include durational or tier rating, or adverse changes in health status or

29-32 claim experience after the policy is issued.

29-33 5. As used in this section, "characteristics" means demographic or

29-34 other information concerning individuals that is considered by a carrier in

29-35 the determination of premium rates for individuals.

29-36 Sec. 39. NRS 689B.027 is hereby amended to read as follows:

29-37 689B.027 1. The commissioner shall adopt regulations which require

29-38 an insurer to file with the commissioner, for his approval, a disclosure

29-39 summarizing the coverage provided by each policy of group health

29-40 insurance offered by the insurer. The disclosure must include:

29-41 (a) Any significant exception, reduction or limitation that applies to the

29-42 policy;

30-1 (b) Any restrictions on payments for emergency care, including related

30-2 definitions of an emergency and medical necessity;

30-3 (c) Any provisions concerning the insurer’s right to change premium

30-4 rates and the characteristics, other than claim experience, that affect

30-5 changes in premium rates;

30-6 (d) Any provisions relating to renewability;

30-7 (e) Any provisions relating to preexisting conditions; and

30-8 (f) Any other information,

30-9 that the commissioner finds necessary to provide for full and fair disclosure

30-10 of the provisions of the policy.

30-11 2. The disclosure must be written in language which is easily

30-12 understood and [must] include a statement that the disclosure is a summary

30-13 of the policy only, and that the policy [itself] should be read to determine

30-14 the governing contractual provisions.

30-15 3. The commissioner shall not approve any proposed disclosure

30-16 submitted to him pursuant to this section which does not comply with the

30-17 requirements of this section and the applicable regulations.

30-18 4. The insurer shall make available to an employer or a producer

30-19 acting on behalf of an employer upon request a copy of the disclosure

30-20 approved by the commissioner pursuant to this section for each policy of

30-21 health insurance coverage for which that employer may be eligible.

30-22 Sec. 40. NRS 689B.380 is hereby amended to read as follows:

30-23 689B.380 "Creditable coverage" means health benefits or coverage

30-24 provided to a person pursuant to:

30-25 1. A group health plan;

30-26 2. A health benefit plan;

30-27 3. Part A or Part B of Title XVIII of the Social Security Act, 42 U.S.C.

§§ 1395c et seq., also known as Medicare;

30-28 4. Title XIX of the Social Security Act, 42 U.S.C. §§ 1396 et seq., also

30-29 known as Medicaid, other than coverage consisting solely of benefits under

30-30 section 1928 of that Title [;

30-31 5. Chapter 55 of Title 10, United States Code (] , 42 U.S.C. § 1396s;

30-32 5. The Civilian Health and Medical Program of Uniformed Services

30-33 [(CHAMPUS));] , CHAMPUS, 10 U.S.C. §§ 1071 et seq.;

30-34 6. A medical care program of the Indian Health Service or of a tribal

30-35 organization;

30-36 7. A state health benefit risk pool;

30-37 8. A health plan offered pursuant to [chapter 89 of Title 5, United

30-38 States Code (] the Federal Employees Health Benefits Program

30-39 [(FEHBP));] , FEHBP, 5 U.S.C. §§ 8901 et seq.;

30-40 9. A public health plan as defined in federal regulations authorized by

30-41 the Public Health Service Act, [section 2701(c)(1)(I), as amended by

30-42 Public Law 104-191; or] , 42 U.S.C. §§ 201 et seq.;

31-1 10. A health benefit plan under section 5(e) of the Peace Corps Act ,

31-2 [(] 22 U.S.C. § 2504(e) [).] ;

31-3 11. A short-term health insurance policy; or

31-4 12. A blanket student accident and health insurance policy.

31-5 Sec. 41. NRS 689B.410 is hereby amended to read as follows:

31-6 689B.410 1. "Health benefit plan" means a policy, contract,

31-7 certificate or agreement offered by a carrier to provide for, arrange for

31-8 payment of, pay for or reimburse any of the costs of health care services.

31-9 Except as otherwise provided in this section, the term includes [short-term

31-10 and] catastrophic health insurance policies, and a policy that pays on a cost-

31-11 incurred basis.

31-12 2. The term does not include:

31-13 (a) Coverage that is only for accident or disability income insurance, or

31-14 any combination thereof;

31-15 (b) Coverage issued as a supplement to liability insurance;

31-16 (c) Liability insurance, including general liability insurance and

31-17 automobile liability insurance;

31-18 (d) Workers’ compensation or similar insurance;

31-19 (e) Coverage for medical payments under a policy of automobile

31-20 insurance;

31-21 (f) Credit insurance;

31-22 (g) Coverage for on-site medical clinics; [and]

31-23 (h) Other similar insurance coverage specified in federal regulations

31-24 issued pursuant to the Health Insurance Portability and Accountability

31-25 Act of 1996, Public Law 104-191 , under which benefits for medical care

31-26 are secondary or incidental to other insurance benefits [.] ;

31-27 (i) Coverage under a short-term health insurance policy; and

31-28 (j) Coverage under a blanket student accident and health insurance

31-29 policy.

31-30 3. If the benefits are provided under a separate policy, certificate or

31-31 contract of insurance or are otherwise not an integral part of a health

31-32 benefit plan, the term does not include the following benefits:

31-33 (a) Limited-scope dental or vision benefits;

31-34 (b) Benefits for long-term care, nursing home care, home health care or

31-35 community-based care, or any combination thereof; and

31-36 (c) Such other similar benefits as are specified in any federal regulations

31-37 adopted pursuant to the Health Insurance Portability and Accountability

31-38 Act of 1996, Public Law 104-191.

31-39 4. For the purposes of NRS 689B.340 to 689B.600, inclusive, if the

31-40 benefits are provided under a separate policy, certificate or contract of

31-41 insurance, there is no coordination between the provision of the benefits

31-42 and any exclusion of benefits under any group health plan maintained by

31-43 the same plan sponsor, and [such] the benefits are paid for a claim without

32-1 regard to whether benefits are provided for such a claim under any group

32-2 health plan maintained by the same plan sponsor, the term does not include:

32-3 (a) Coverage that is only for a specified disease or illness; and

32-4 (b) Hospital indemnity or other fixed indemnity insurance.

32-5 5. For the purposes of NRS 689B.340 to 689B.600, inclusive, if

32-6 offered as a separate policy, certificate or contract of insurance, the term

32-7 does not include:

32-8 (a) Medicare supplemental health insurance as defined in section

32-9 1882(g)(1) of the Social Security Act, 42 U.S.C. § 1395ss, as that section

32-10 existed on July 16, 1997;

32-11 (b) Coverage supplemental to the coverage provided pursuant to

32-12 [chapter 55 of Title 10, United States Code (] the Civilian Health and

32-13 Medical Program of Uniformed Services [(CHAMPUS));] , CHAMPUS,

32-14 10 U.S.C. §§ 1071 et seq.; and

32-15 (c) Similar supplemental coverage provided under a group health plan.

32-16 Sec. 42. NRS 689B.460 is hereby amended to read as follows:

32-17 689B.460 "Waiting period" means the period established by a plan of

32-18 health insurance that must pass before a person who is an eligible

32-19 participant or beneficiary in a plan is covered for benefits under the terms

32-20 of the plan. The term includes the period from the date a person submits

32-21 an application to an individual carrier for coverage under a health

32-22 benefit plan until the first day of coverage under that health benefit plan.

32-23 Sec. 43. NRS 689B.500 is hereby amended to read as follows:

32-24 689B.500 1. Except as otherwise provided in this section, a carrier

32-25 that issues a group health plan or coverage under group health insurance

32-26 shall not deny, exclude or limit a benefit for a preexisting condition for:

32-27 (a) More than 12 months after the effective date of coverage if the

32-28 employee enrolls through open enrollment or after the first day of the

32-29 waiting period for [such] that enrollment, whichever is earlier; or

32-30 (b) More than 18 months after the effective date of coverage for a late

32-31 enrollee.

32-32 A carrier may not define a preexisting condition more restrictively than that

32-33 term is defined in NRS 689B.450.

32-34 2. The period of any exclusion for a preexisting condition imposed by

32-35 a group health plan or coverage under group health insurance on a person

32-36 to be insured in accordance with the provisions of this chapter must be

32-37 reduced by the aggregate period of creditable coverage of that person, if the

32-38 creditable coverage was continuous to a date not more than 63 days before

32-39 the effective date of the coverage. The period of continuous coverage must

32-40 not include:

32-41 (a) Any waiting period for the effective date of the new coverage

32-42 applied by the employer or the carrier; or

33-1 (b) Any affiliation period not to exceed 60 days for a new enrollee and

33-2 [63] 90 days for a late enrollee required before becoming eligible to enroll

33-3 in the group health plan.

33-4 3. A health maintenance organization authorized to transact insurance

33-5 pursuant to chapter 695C of NRS that does not restrict coverage for a

33-6 preexisting condition may require an affiliation period before coverage

33-7 becomes effective under a plan of insurance if the affiliation period applies

33-8 uniformly to all employees and without regard to any health status-related

33-9 factors. During the affiliation period, the carrier shall not collect any

33-10 premiums for coverage of the employee.

33-11 4. An insurer that restricts coverage for preexisting conditions shall not

33-12 impose an affiliation period.

33-13 5. A carrier shall not impose any exclusion for a preexisting condition:

33-14 (a) Relating to pregnancy.

33-15 (b) In the case of a person who, as of the last day of the 30-day period

33-16 beginning on the date of his birth, is covered under creditable coverage.

33-17 (c) In the case of a child who is adopted or placed for adoption before

33-18 attaining the age of 18 years and who, as of the last day of the 30-day

33-19 period beginning on the date of adoption or placement for adoption,

33-20 whichever is earlier, is covered under creditable coverage. The provisions

33-21 of this paragraph do not apply to coverage before the date of adoption or

33-22 placement for adoption.

33-23 (d) In the case of a condition for which medical advice, diagnosis, care

33-24 or treatment was recommended or received for the first time while the

33-25 covered person held creditable coverage, and the medical advice, diagnosis,

33-26 care or treatment was a benefit under the plan, if the creditable coverage

33-27 was continuous to a date not more than 63 days before the effective date of

33-28 the new coverage.

33-29 The provisions of paragraphs (b) and (c) do not apply to a person after the

33-30 end of the first 63-day period during all of which the person was not

33-31 covered under any creditable coverage.

33-32 6. As used in this section, "late enrollee" means an eligible employee,

33-33 or his dependent, who requests enrollment in a group health plan following

33-34 the initial period of enrollment, if that initial period of enrollment is at least

33-35 30 days, during which the person is entitled to enroll under the terms of the

33-36 health benefit plan. The term does not include an eligible employee or his

33-37 dependent if:

33-38 (a) The employee or dependent:

33-39 (1) Was covered under creditable coverage at the time of the initial

33-40 enrollment;

33-41 (2) Lost coverage under creditable coverage as a result of cessation of

33-42 contributions by his employer, termination of employment or eligibility,

33-43 reduction in the number of hours of employment, involuntary termination

34-1 of creditable coverage, or death of, or divorce or legal separation from, a

34-2 covered spouse; and

34-3 (3) Requests enrollment not later than 30 days after the date on which

34-4 his creditable coverage was terminated or on which the change in

34-5 conditions that gave rise to the termination of the coverage occurred.

34-6 (b) The employee enrolls during the open enrollment period, as

34-7 provided in the contract or as otherwise specifically provided by specific

34-8 statute.

34-9 (c) The employer of the employee offers multiple health benefit plans

34-10 and the employee elected a different plan during an open enrollment period.

34-11 (d) A court has ordered coverage to be provided to the spouse or a

34-12 minor or dependent child of an employee under a health benefit plan of the

34-13 employee and a request for enrollment is made within 30 days after the

34-14 issuance of the court order.

34-15 (e) The employee changes status from not being an eligible employee to

34-16 being an eligible employee and requests enrollment, subject to any waiting

34-17 period, within 30 days after the change in status.

34-18 (f) The person has continued coverage in accordance with the

34-19 Consolidated Omnibus Budget Reconciliation Act of 1985 , Public Law

34-20 99-272, and [such] that coverage has been exhausted.

34-21 Sec. 44. NRS 689B.590 is hereby amended to read as follows:

34-22 689B.590 1. Not later than 180 days after the date on which the basic

34-23 and standard health benefit plans are approved pursuant to NRS 689C.770

34-24 as part of the plan of operation of the program of reinsurance, each carrier

34-25 required to offer to a person a converted policy pursuant to NRS 689B.120

34-26 shall only offer as a converted policy a choice of the basic and standard

34-27 health benefit plans.

34-28 2. A person with a converted policy issued before the effective date of

34-29 the requirement set forth in subsection 1 may, at each annual renewal of the

34-30 converted policy elect a basic or standard health benefit plan as a substitute

34-31 converted policy, except that the carrier may, if the person has not made an

34-32 election within 3 years after first becoming eligible to do so, require the

34-33 person to make such an election. Once a person has elected [either] the

34-34 basic or standard health benefit plan as a substitute converted policy, he

34-35 may not elect another converted policy.

34-36 3. The premium for a converted policy may not exceed the small group

34-37 index rate, as defined in paragraph (b) of subsection 3 of NRS 689C.230,

34-38 applicable to the carrier by more than [110] 75 percent. The small group

34-39 index rate used by a carrier that does not write insurance to small

34-40 employers in this state must be the average small group index rate, as

34-41 determined by the commissioner, of the five largest carriers that provide

34-42 coverage to small employers pursuant to this chapter for their basic and

34-43 standard health benefit plans. The commissioner shall annually determine

35-1 the average small group index rate, as measured by the premium volume of

35-2 the plans, of those five largest carriers.

35-3 4. The rates for new and renewal converted policies for persons with

35-4 the same converted policies whose case characteristics are similar must be

35-5 the same.

35-6 5. Any losses suffered by a carrier on its converted policies issued

35-7 pursuant to this section must be spread across the entire book of the health

35-8 benefit coverage of the carrier issued or delivered for issuance to small

35-9 employers and large group employers in this state.

35-10 6. The commissioner shall adopt such regulations as are necessary to

35-11 carry out the provisions of this section.

35-12 Sec. 45. Chapter 689C of NRS is hereby amended by adding thereto

35-13 the provisions set forth as sections 46 and 47 of this act.

35-14 Sec. 46. No member, agent or employee of the board may be held

35-15 liable in a civil action for any act that he performs in good faith in the

35-16 execution of his duties pursuant to the provisions of this chapter.

35-17 Sec. 47. The provisions of this chapter apply to health benefit plans

35-18 that provide coverage to the employees of small employers in this state

35-19 and to carriers that offer those health benefit plans if:

35-20 1. A portion of the premium or benefits are paid by or on behalf of

35-21 the small employer;

35-22 2. An eligible employee or his dependent is reimbursed for a portion

35-23 of the premium, whether by wage adjustments or otherwise, by or on

35-24 behalf of the small employer; or

35-25 3. The health benefit plan is considered by the small employer or any

35-26 of his eligible employees or dependents as part of a plan or program for

35-27 the purposes of sections 106, 125 or 162 of the Internal Revenue Code,

35-28 26 U.S.C. § 106, 125 or 162.

35-29 Sec. 48. NRS 689C.053 is hereby amended to read as follows:

35-30 689C.053 "Creditable coverage" means health benefits or coverage

35-31 provided to a person pursuant to:

35-32 1. A group health plan;

35-33 2. A health benefit plan;

35-34 3. Part A or Part B of Title XVIII of the Social Security Act, 42 U.S.C.

§§ 1395c et seq., also known as Medicare;

35-35 4. Title XIX of the Social Security Act, 42 U.S.C. §§ 1396 et seq., also

35-36 known as Medicaid, other than coverage consisting solely of benefits under

35-37 section 1928 of that Title [;

35-38 5. Chapter 55 of Title 10, United States Code (] , 42 U.S.C. § 1396s;

35-39 5. The Civilian Health and Medical Program of Uniformed Services

35-40 [(CHAMPUS));] , CHAMPUS, 10 U.S.C. §§ 1071 et seq.;

35-41 6. A medical care program of the Indian Health Service or of a tribal

35-42 organization;

36-1 7. A state health benefit risk pool;

36-2 8. A health plan offered pursuant to [chapter 89 of Title 5, United

36-3 States Code (] the Federal Employees Health Benefits Program

36-4 [(FEHBP));] , FEHBP, 5 U.S.C. §§ 8901 et seq.;

36-5 9. A public health plan as defined in federal regulations authorized by

36-6 the Public Health Service Act, [section 2701(c)(1)(I), as amended by

36-7 Public Law 104-191; or] 42 U.S.C. §§ 201 et seq.;

36-8 10. A health benefit plan under section 5(e) of the Peace Corps Act ,

36-9 [(] 22 U.S.C. § 2504(e) [).] ;

36-10 11. A short-term health insurance policy; or

36-11 12. A blanket student accident and health insurance policy.

36-12 Sec. 49. NRS 689C.075 is hereby amended to read as follows:

36-13 689C.075 1. "Health benefit plan" means a policy or certificate for

36-14 hospital or medical expenses, a contract for dental, hospital or medical

36-15 services, or a health care plan of a health maintenance organization

36-16 available for use, offered or sold to a small employer. Except as otherwise

36-17 provided in this section, the term includes short-term and catastrophic

36-18 health insurance policies, and a policy that pays on a cost-incurred basis.

36-19 2. The term does not include:

36-20 (a) Coverage that is only for accident or disability income insurance, or

36-21 any combination thereof;

36-22 (b) Coverage issued as a supplement to liability insurance;

36-23 (c) Liability insurance, including general liability insurance and

36-24 automobile liability insurance;

36-25 (d) Workers’ compensation or similar insurance;

36-26 (e) Coverage for medical payments under a policy of automobile

36-27 insurance;

36-28 (f) Credit insurance;

36-29 (g) Coverage for on-site medical clinics; [and]

36-30 (h) Coverage under a short-term health insurance policy;

36-31 (i) Coverage under a blanket student accident and health insurance

36-32 policy; and

36-33 (j) Other similar insurance coverage specified in federal regulations

36-34 issued pursuant to the Health Insurance Portability and Accountability

36-35 Act of 1996, Public Law 104-191 , under which benefits for medical care

36-36 are secondary or incidental to other insurance benefits.

36-37 3. If the benefits are provided under a separate policy, certificate or

36-38 contract of insurance or are otherwise not an integral part of a health

36-39 benefit plan, the term does not include the following benefits:

36-40 (a) Limited-scope dental or vision benefits;

36-41 (b) Benefits for long-term care, nursing home care, home health care or

36-42 community-based care, or any combination thereof; and

37-1 (c) Such other similar benefits as are specified in any federal regulations

37-2 adopted pursuant to the Health Insurance Portability and Accountability

37-3 Act of 1996, Public Law 104-191.

37-4 4. If the benefits are provided under a separate policy, certificate or

37-5 contract of insurance, there is no coordination between the provision of the

37-6 benefits and any exclusion of benefits under any group health plan

37-7 maintained by the same plan sponsor, and [such] the benefits are paid for a

37-8 claim without regard to whether benefits are provided for such a claim

37-9 under any group health plan maintained by the same plan sponsor, the term

37-10 does not include:

37-11 (a) Coverage that is only for a specified disease or illness; and

37-12 (b) Hospital indemnity or other fixed indemnity insurance.

37-13 5. If offered as a separate policy, certificate or contract of insurance,

37-14 the term does not include:

37-15 (a) Medicare supplemental health insurance as defined in section

37-16 1882(g)(1) of the Social Security Act, 42 U.S.C. § 1395ss, as that section

37-17 existed on July 16, 1997;

37-18 (b) Coverage supplemental to the coverage provided pursuant to

37-19 [chapter 55 of Title 10, United States Code (] the Civilian Health and

37-20 Medical Program of Uniformed Services [(CHAMPUS));] , CHAMPUS,

37-21 10 U.S.C. §§ 1071 et seq.; and

37-22 (c) Similar supplemental coverage provided under a group health plan.

37-23 Sec. 50. NRS 689C.095 is hereby amended to read as follows:

37-24 689C.095 1. "Small employer" means , [any person or governmental

37-25 entity actively engaged in a business:

37-26 (a) Which,] with respect to a calendar year and a plan year, an employer

37-27 who employed on business days during the preceding calendar year an

37-28 average of at least 2 [,] employees, but not more than 50 employees, [a

37-29 majority of whom are residents of this state,] who have a normal work week

37-30 of 30 hours or more, and [which] who employs at least 2 employees on the

37-31 first day of the plan year . [;

37-32 (b) Which was not formed primarily for the purpose of purchasing

37-33 insurance; and

37-34 (c) In which a relationship between the employer and the employees

37-35 exists in good faith.] For the purposes of determining the number of eligible

37-36 employees, organizations which are affiliated or which are eligible to file a

37-37 combined tax return for the purposes of taxation constitute one employer.

37-38 2. For the purposes of this section, organizations are "affiliated" if one

37-39 directly, or indirectly, through one or more intermediaries, controls or is

37-40 controlled by, or is under common control with, the other, as determined

37-41 pursuant to the provisions of NRS 692C.050.

38-1 Sec. 51. NRS 689C.106 is hereby amended to read as follows:

38-2 689C.106 "Waiting period" means the period established by a plan of

38-3 health insurance that must pass before a person who is an eligible

38-4 participant or beneficiary in a plan is covered for benefits under the terms

38-5 of the plan. The term includes the period from the date a person submits

38-6 an application to an individual carrier for coverage under a health

38-7 benefit plan until the first day of coverage under that health benefit plan.

38-8 Sec. 52. NRS 689C.210 is hereby amended to read as follows:

38-9 689C.210 1. Except as otherwise provided in subsection 3, a carrier

38-10 shall not increase the premium rate charged to a small employer for a new

38-11 rating period by a percentage greater than the sum of:

38-12 (a) The percentage of change in the premium rate for new business for

38-13 the policy under which the small employer is covered, measured from the

38-14 first day of the previous rating period to the first day of the new rating

38-15 period;

38-16 (b) An adjustment, not to exceed 15 percent annually, adjusted pro rata

38-17 for rating periods of less than 1 year, on account of the claim experience,

38-18 health status, or duration of coverage of the employees or dependents of the

38-19 small employer as determined from the carrier’s rate manual for the class of

38-20 business; and

38-21 (c) Any adjustment on account of change in coverage or change in the

38-22 characteristics of the small employer as determined from the carrier’s rate

38-23 manual for the class of business.

38-24 2. If the carrier no longer issues new policies for that class of business,

38-25 the carrier shall use the percentage of change in the premium rate for new

38-26 business for the class of business which is most similar to the closed class

38-27 of business and for which the carrier is issuing new policies.

38-28 3. In the case of health benefit plans delivered or issued for delivery

38-29 before January 1, 1996, for groups with [no] not fewer than 2 employees

38-30 and [no] not more than 25 employees, or before July 1, 1997, for groups

38-31 with [no] not fewer than 26 employees and [no] not more than 50

38-32 employees, a premium rate for a rating period may exceed the ranges set

38-33 forth in [paragraphs (a) and (b) of subsection 1] NRS 689C.230 for a

38-34 period of 3 years following that date. In that case, the percentage of

38-35 increase in the premium rate charged to a small employer for a new rating

38-36 period may not exceed the sum of:

38-37 (a) The percentage of change in the premium rate for new business

38-38 measured from the first day of the previous rating period to the first day of

38-39 the new rating period. In the case of a health benefit plan into which the

38-40 carrier is no longer enrolling new small employers, the carrier shall use the

38-41 percentage of change in the base premium rate if that change does not

39-1 exceed, on a percentage basis, the change in the premium rate for new

39-2 business for the most similar health benefit plan into which the carrier is

39-3 actively enrolling new small employers.

39-4 (b) Any adjustment on account of change in coverage or change in the

39-5 characteristics of the small employer as determined from the carrier’s rate

39-6 manual for the class of business.

39-7 Sec. 53. NRS 689C.270 is hereby amended to read as follows:

39-8 689C.270 1. The commissioner shall adopt regulations which require

39-9 a carrier to file with the commissioner, for his approval, a disclosure

39-10 offered by the carrier to a small employer. The disclosure must include:

39-11 (a) Any significant exception, reduction or limitation that applies to the

39-12 policy;

39-13 (b) Any restrictions on payments for emergency care, including, without

39-14 limitation, related definitions of an emergency and medical necessity;

39-15 (c) The provision of the health benefit plan concerning the carrier’s right

39-16 to change premium rates and the characteristics, other than claim

39-17 experience, that affect changes in premium rates;

39-18 (d) The provisions relating to renewability of policies and contracts;

39-19 (e) The provisions relating to any preexisting condition; and

39-20 (f) Any other information that the commissioner finds necessary to

39-21 provide for full and fair disclosure of the provisions of a policy or contract

39-22 of insurance issued pursuant to this chapter.

39-23 2. The disclosure must be written in language which is easily

39-24 understood and must include a statement that the disclosure is a summary

39-25 of the policy only, and that the policy itself should be read to determine the

39-26 governing contractual provisions.

39-27 3. The commissioner shall not approve any proposed disclosure

39-28 submitted to him pursuant to this section which does not comply with the

39-29 requirements of this section and the applicable regulations.

39-30 4. The carrier shall make available to a small employer or a producer

39-31 acting on behalf of a small employer, upon request a copy of the

39-32 disclosure approved by the commissioner pursuant to this section for

39-33 policies of health insurance for which that employer may be eligible.

39-34 Sec. 54. (Deleted by amendment.)

39-35 Sec. 55. NRS 689C.610 is hereby amended to read as follows:

39-36 689C.610 As used in NRS 689C.610 to 689C.980, inclusive, and

39-37 section 46 of this act, unless the context otherwise requires, the words and

39-38 terms defined in NRS 689C.620 to 689C.730, inclusive, have the meanings

39-39 ascribed to them in those sections.

39-40 Sec. 56. NRS 689C.870 is hereby amended to read as follows:

39-41 689C.870 1. If, in each of 2 consecutive years, the board determines

39-42 that the amount of the assessment needed exceeds 5 percent of the total

39-43 premiums earned in the previous calendar year from health benefit plans

40-1 delivered or issued for delivery to small employers by reinsuring carriers,

40-2 the program of reinsurance is eligible for additional funding pursuant to this

40-3 section.

40-4 2. If, in each of 2 consecutive years, the board determines that the

40-5 amount of the assessment needed exceeds 5 percent of the total premiums

40-6 earned in the previous calendar year from health benefit plans delivered or

40-7 issued for delivery to individuals by individual reinsuring carriers, the

40-8 program of reinsurance is eligible for additional funding pursuant to this

40-9 section.

40-10 3. To raise [such] the additional funding, the board shall establish a

40-11 formula pursuant to which additional assessments may be made on all

40-12 carriers that offer a health benefit plan or provide stop-loss coverage for a

40-13 health benefit plan which is an [employee-sponsored] employer-sponsored

40-14 plan or a plan established pursuant to the Labor-Management Relations

40-15 Act, 1947, as amended. The total additional assessments on all such

40-16 carriers combined may not exceed one-half of 1 percent of the total

40-17 premiums earned from all health benefit plans and stop-loss coverage

40-18 issued in this state in the previous calendar year.

40-19 Sec. 57. NRS 690B.042 is hereby amended to read as follows:

40-20 690B.042 1. Except as otherwise provided in subsection 2, any party

40-21 against whom a claim is asserted for compensation or damages for personal

40-22 injury under a policy of motor vehicle insurance covering a private

40-23 passenger car may require any attorney representing the claimant to provide

40-24 to the party and his insurer or attorney, not more than once every 90 days,

40-25 all medical reports [or] , records and bills concerning the claim.

40-26 2. In lieu of providing medical reports [or] , records and bills pursuant

40-27 to subsection 1, the claimant or any attorney representing the claimant may

40-28 [authorize in writing any provider of health care to provide to the party and

40-29 his insurer or attorney photocopies of the medical reports or] provide to the

40-30 party, his insurer or his attorney a written authorization to receive the

40-31 reports, records and bills from the provider of health care. At the written

40-32 request of the claimant or his attorney, copies of all reports, records and

40-33 bills obtained pursuant to the authorization must be provided to the

40-34 claimant or his attorney within 30 days after the date they are received. If

40-35 the claimant or his attorney makes a written request for the reports,

40-36 records and bills, the claimant or his attorney shall pay for the

40-37 reasonable costs of copying the reports, records and bills.

40-38 3. Upon receipt of any photocopies of medical reports [or] , records

40-39 and bills , or a written authorization pursuant to subsection 2, the insurer

40-40 who issued the policy specified in subsection 1 shall, upon request,

40-41 immediately disclose to the insured or the claimant all pertinent facts or

40-42 provisions of the policy relating to any coverage at issue.

41-1 Sec. 58. NRS 692A.105 is hereby amended to read as follows:

41-2 692A.105 1. The commissioner may refuse to license any title agent

41-3 or escrow officer or may suspend or revoke any license or impose a fine of

41-4 not more than $500 for each violation by entering an order to that effect,

41-5 with his findings in respect thereto, if upon a hearing, it is determined that

41-6 the applicant or licensee:

41-7 (a) In the case of a title agent, is insolvent or in such a financial

41-8 condition that he cannot continue in business with safety to his customers;

41-9 (b) Has violated any provision of this chapter or any regulation adopted

41-10 pursuant thereto or has aided and abetted another to do so;

41-11 (c) Has committed fraud in connection with any transaction governed by

41-12 this chapter;

41-13 (d) Has intentionally or knowingly made any misrepresentation or false

41-14 statement to, or concealed any essential or material fact known to him from,

41-15 any principal or designated agent of the principal in the course of the

41-16 escrow business;

41-17 (e) Has intentionally or knowingly made or caused to be made to the

41-18 commissioner any false representation of a material fact or has suppressed

41-19 or withheld from him any information which the applicant or licensee

41-20 possesses;

41-21 (f) Has failed without reasonable cause to furnish to the parties of an

41-22 escrow their respective statements of the settlement within a reasonable

41-23 time after the close of escrow;

41-24 (g) Has failed without reasonable cause to deliver, within a reasonable

41-25 time after the close of escrow, to the respective parties of an escrow

41-26 transaction any money, documents or other properties held in escrow in

41-27 violation of the provisions of the escrow instructions;

41-28 (h) Has refused to permit an examination by the commissioner of his

41-29 books and affairs or has refused or failed, within a reasonable time, to

41-30 furnish any information or make any report that may be required by the

41-31 commissioner pursuant to the provisions of this chapter;

41-32 (i) Has been convicted of a felony or any misdemeanor of which an

41-33 essential element is fraud;

41-34 (j) In the case of a title agent, has failed to maintain complete and

41-35 accurate records of all transactions within the last 7 years;

41-36 (k) Has commingled the money of [others] other persons with his own

41-37 or converted the money of [others] other persons to his own use;

41-38 (l) Has failed, before the close of escrow, to obtain written instructions

41-39 concerning any essential or material fact or intentionally failed to follow

41-40 the written instructions which have been agreed upon by the parties and

41-41 accepted by the holder of the escrow;

41-42 (m) Has failed to disclose in writing that he is acting in the dual capacity

41-43 of escrow agent or agency and undisclosed principal in any transaction; [or]

42-1 (n) In the case of an escrow officer, has been convicted of, or entered a

42-2 plea of guilty or nolo contendere to, any crime involving moral turpitude [.]

42-3 ; or

42-4 (o) Has failed to obtain and maintain a copy of the executed

42-5 agreement or contract that establishes the conditions for the sale of real

42-6 property.

42-7 2. It is sufficient cause for the imposition of a fine or the refusal,

42-8 suspension or revocation of the license of a partnership, corporation or any

42-9 other association if any member of the partnership or any officer or director

42-10 of the corporation or association has been guilty of any act or omission

42-11 directly arising from the business activities of a title agent which would be

42-12 cause for such action had the applicant or licensee been a natural person.

42-13 3. The commissioner may suspend or revoke the license of a title agent,

42-14 or impose a fine, if the commissioner finds that the title agent:

42-15 (a) Failed to maintain adequate supervision of an escrow officer title

42-16 agent he has appointed or employed.

42-17 (b) Instructed an escrow officer to commit an act which would be cause

42-18 for the revocation of the escrow officer’s license and the escrow officer

42-19 committed the act. An escrow officer is not subject to disciplinary action

42-20 for committing such an act under instruction by the title agent.

42-21 4. The commissioner may refuse to issue a license to any person who,

42-22 within 10 years before the date of applying for a current license, has had

42-23 suspended or revoked a license issued pursuant to this chapter or a

42-24 comparable license issued by any other state, district or territory of the

42-25 United States or any foreign country.

42-26 Sec. 59. Chapter 695C of NRS is hereby amended by adding thereto a

42-27 new section to read as follows:

42-28 1. To the extent authorized by federal law, the commissioner shall

42-29 adopt regulations for the licensing of provider-sponsored organizations

42-30 in this state.

42-31 2. As used in this section, "provider-sponsored organization" has the

42-32 meaning ascribed to it in 42 U.S.C. § 1395w-25(d).

42-33 Sec. 60. NRS 695C.350 is hereby amended to read as follows:

42-34 695C.350 1. The commissioner may, in lieu of suspension or

42-35 revocation of a certificate of authority under NRS 695C.330, levy an

42-36 administrative penalty in an amount not [less than $1,000 nor] more than

42-37 $2,500 [,] for each act or violation, if reasonable notice in writing is given

42-38 of the intent to levy the penalty . [and the health maintenance organization

42-39 has a reasonable time within which to remedy the defect in its operations

42-40 which gave rise to the penalty citation.]

42-41 2. Any person who violates the provisions of this chapter is guilty of a

42-42 misdemeanor.

43-1 3. If the commissioner or the state board of health for any reason have

43-2 cause to believe that any violation of this chapter has occurred or is

43-3 threatened, the commissioner or the state board of health may give notice to

43-4 the health maintenance organization and to the representatives, or other

43-5 persons who appear to be involved in [such] the suspected violation, to

43-6 arrange a conference with the alleged violators or their authorized

43-7 representatives [for the purpose of attempting to ascertain] to attempt to

43-8 determine the facts relating to [such] the suspected violation, and, [in the

43-9 event] if it appears that any violation has occurred or is threatened, to arrive

43-10 at an adequate and effective means of correcting or preventing [such] the

43-11 violation.

43-12 4. [Proceedings under subsection 3 shall] The proceedings conducted

43-13 pursuant to the provisions of subsection 3 must not be governed by any

43-14 formal procedural requirements, and may be conducted in such manner as

43-15 the commissioner or the state board of health may deem appropriate under

43-16 the circumstances.

43-17 5. The commissioner may issue an order directing a health maintenance

43-18 organization or a representative of a health maintenance organization to

43-19 cease and desist from engaging in any act or practice in violation of the

43-20 provisions of this chapter.

43-21 6. Within 30 days after service of the order [of] to cease and desist, the

43-22 respondent may request a hearing on the question of whether acts or

43-23 practices in violation of this chapter have occurred. [Such hearings shall be

43-24 conducted pursuant to the Nevada Administrative Procedure Act, and

43-25 judicial review shall] The hearing must be conducted pursuant to the

43-26 provisions of chapter 233B of NRS and judicial review must be available

43-27 as provided therein.

43-28 7. In the case of any violation of the provisions of this chapter, if the

43-29 commissioner elects not to issue a cease and desist order, or in the event of

43-30 noncompliance with a cease and desist order issued pursuant to subsection

43-31 5, the commissioner may institute a proceeding to obtain injunctive relief,

43-32 or seek other appropriate relief in the district court of the judicial district of

43-33 the county in which the violator resides.

43-34 Sec. 61. NRS 696B.415 is hereby amended to read as follows:

43-35 696B.415 1. Upon the issuance of an order of liquidation with a

43-36 finding of insolvency against a domestic insurer, the commissioner shall

43-37 apply to the district court for authority to disburse money to the Nevada

43-38 insurance guaranty association or the Nevada life and health insurance

43-39 guaranty association out of the [insurer’s] marshaled assets [,] of the

43-40 insurer, as money becomes available, in amounts equal to disbursements

43-41 made or to be made by the association for claims-handling expense and

43-42 covered-claims obligations upon the presentation of evidence that

43-43 disbursements have been made by the association. The commissioner shall

44-1 apply to the district court for authority to make similar disbursements to

44-2 insurance guaranty associations in other jurisdictions if one of the Nevada

44-3 associations is entitled to like payment [under] pursuant to the laws

44-4 relating to insolvent insurers in the jurisdiction in which the organization is

44-5 domiciled.

44-6 2. The commissioner, in determining the amounts available for

44-7 disbursement to the Nevada insurance guaranty association, the Nevada life

44-8 and health insurance guaranty association, and similar organizations in

44-9 other jurisdictions, shall reserve sufficient assets for the payment of the

44-10 expenses of administration.

44-11 3. The commissioner shall establish procedures for the ratable

44-12 allocation of disbursements to the Nevada insurance guaranty association,

44-13 the Nevada life and health insurance guaranty association, and similar

44-14 organizations in other jurisdictions, and shall secure from each organization

44-15 to which money is paid as a condition to advances in reimbursement of

44-16 covered-claims obligations an agreement to return to the commissioner, on

44-17 demand, amounts previously advanced which are required to pay claims of

44-18 secured creditors and claims falling within the priorities established in

44-19 paragraph (a) or (b) of subsection 1 of NRS 696B.420 . [for

44-20 administration costs and expenses , and wage debts due employees for

44-21 services performed.]

44-22 Sec. 62. NRS 696B.420 is hereby amended to read as follows:

44-23 696B.420 1. The order of distribution of claims from the [insurer’s]

44-24 estate of the insurer on liquidation of the insurer must be as [stated] set

44-25 forth in this section. [The first $50 of the amount allowed on each claim in

44-26 the classes under paragraphs (b) to (g), inclusive, must be deducted from

44-27 the claim and included in the class under paragraph (i). Claims may not be

44-28 cumulated by assignment to avoid application of the $50 deductible

44-29 provision. Subject to the $50 deductible provision, every] Each claim in

44-30 each class must be paid in full or adequate money retained for the payment

44-31 before the members of the next class receive any payment. No subclasses

44-32 may be established within any class. Except as otherwise provided in

44-33 subsection 2, the order of distribution and of priority must be as follows:

44-34 (a) Administration costs and expenses, including, but not limited to, the

44-35 following:

44-36 (1) The actual and necessary costs of preserving or recovering the

44-37 assets of the insurer;

44-38 (2) Compensation for [all] any services rendered in the liquidation;

44-39 (3) Any necessary filing fees;

44-40 (4) The fees and mileage payable to witnesses; and

44-41 (5) Reasonable attorney’s fees.

44-42 (b) Loss claims, including [all] any claims under policies for losses

44-43 incurred, including third party claims, [all] any claims against the insurer

45-1 for liability for bodily injury or for injury to or destruction of tangible

45-2 property which are not under policies, and [all] any claims of the Nevada

45-3 insurance guaranty association, the Nevada life and health insurance

45-4 guaranty association, and other similar statutory organizations in other

45-5 jurisdictions . [, except the first $200 of losses otherwise payable to any

45-6 claimant under this paragraph. All] Any claims under life insurance and

45-7 annuity policies, whether for death proceeds, annuity proceeds or

45-8 investment values, must be treated as loss claims. [Claims may not be

45-9 cumulated by assignment to avoid application of the $200 deductible

45-10 provision.] That portion of any loss for which indemnification is provided

45-11 by other benefits or advantages recovered or recoverable by the claimant

45-12 may not be included in this class, other than benefits or advantages

45-13 recovered or recoverable in discharge of familial obligations of support or

45-14 [by way] because of succession at death or as proceeds of life insurance, or

45-15 as gratuities. No payment made by an employer to his employee may be

45-16 treated as a gratuity.

45-17 (c) Unearned premiums and small loss claims, including claims under

45-18 nonassessable policies for unearned premiums or other premium refunds .

45-19 [and the first $200 of loss excepted by the deductible provision in

45-20 paragraph (b).]

45-21 (d) Claims of the Federal Government . [and]

45-22 (e) Claims of any state or local government, including, but not limited

45-23 to, a claim of [any governmental body] a state or local government for a

45-24 penalty or forfeiture.

45-25 [(e)] (f) Wage debts due employees for services performed, not to

45-26 exceed $1,000 to each employee, that have been earned within 1 year

45-27 before the filing of the petition for liquidation. Officers of the insurer are

45-28 not entitled to the benefit of this priority. The priority set forth in this

45-29 paragraph must be in lieu of any other similar priority authorized by law as

45-30 to wages or compensation of employees.

45-31 [(f)] (g) Residual classification, including all other claims not falling

45-32 within other classes [under] pursuant to the provisions of this section.

45-33 Claims for a penalty or forfeiture must be allowed in this class only to the

45-34 extent of the pecuniary loss sustained from the act, transaction or

45-35 proceeding out of which the penalty or forfeiture arose, with reasonable and

45-36 actual costs occasioned thereby. The remainder of [such] the claims must

45-37 be postponed to the class of claims [under paragraph (i).

45-38 (g)] specified in paragraph (j).

45-39 (h) Judgment claims based solely on judgments. If a claimant files a

45-40 claim and bases [it both] the claim on the judgment and on the underlying

45-41 facts, the claim must be considered by the liquidator, who shall give the

45-42 judgment such weight as he deems appropriate. The claim as allowed must

45-43 receive the priority it would receive in the absence of the judgment. If the

46-1 judgment is larger than the allowance on the underlying claim, the

46-2 remaining portion of the judgment must be treated as if it were a claim

46-3 based solely on a judgment.

46-4 [(h)] (i) Interest on claims already paid, which must be calculated at the

46-5 legal rate compounded annually on [all] any claims in the classes [under]

46-6 specified in paragraphs (a) to [(g),] (h), inclusive, from the date of the

46-7 petition for liquidation or the date on which the claim becomes due,

46-8 whichever is later, until the date on which the dividend is declared. The

46-9 liquidator, with the approval of the court, may [make] :

46-10 (1) Make reasonable classifications of claims for purposes of

46-11 computing interest [, may make] ;

46-12 (2) Make approximate computations ; and [may ignore]

46-13 (3) Ignore certain classifications and periods as de minimis.

46-14 [(i)] (j) Miscellaneous subordinated claims, [including the remaining

46-15 claims or portions of claims not already paid,] with interest as provided in

46-16 paragraph [(h):

46-17 (1) The first $50 of each claim in the classes under paragraphs (b) to

46-18 (g), inclusive, subordinated under this section;

46-19 (2)] (i):

46-20 (1) Claims subordinated by NRS 696B.430;

46-21 [(3)] (2) Claims filed late;

46-22 [(4)] (3) Portions of claims subordinated [under paragraph (f);

46-23 (5)] pursuant to the provisions of paragraph (g);

46-24 (4) Claims or portions of claims the payment of which is provided by

46-25 other benefits or advantages recovered or recoverable by the claimant; and

46-26 [(6)] (5) Claims not otherwise provided for in this section.

46-27 [(j)] (k) Preferred ownership claims, including surplus or contribution

46-28 notes, or similar obligations, and premium refunds on assessable policies.

46-29 Interest at the legal rate must be added to each claim, as provided in

46-30 paragraphs [(h) and (i).

46-31 (k)] (i) and (j).

46-32 (l) Proprietary claims of shareholders or other owners.

46-33 2. If there are no existing or potential claims of the government against

46-34 the estate, claims for wages have priority over [all] any claims set forth in

46-35 paragraphs (c) to [(j),] (k), inclusive, of subsection 1. The provisions of this

46-36 subsection must not be construed to require the [deduction of $50 or the]

46-37 accumulation of interest for claims as described in paragraph [(h)] (i) of

46-38 subsection 1.

46-39 Sec. 63. NRS 697.090 is hereby amended to read as follows:

46-40 697.090 1. A person in this state shall not act in the capacity of a bail

46-41 agent, bail enforcement agent or bail solicitor, or perform any of the

46-42 functions, duties or powers prescribed for a bail agent, bail enforcement

46-43 agent or bail solicitor under the provisions of this chapter, unless that

47-1 person is qualified and licensed as provided in this chapter. The

47-2 commissioner may, after notice and a hearing, impose a fine of not more

47-3 than $1,000 for each act or violation of the provisions of this subsection.

47-4 2. A person, whether or not located in this state, shall not act as or hold

47-5 himself out to be a general agent unless qualified and licensed as such

47-6 under the provisions of this chapter.

47-7 3. For the protection of the people of this state, the commissioner shall

47-8 not issue or renew, or permit to exist, any license except in compliance with

47-9 this chapter. The commissioner shall not issue or renew, or permit to exist,

47-10 a license for any person found to be untrustworthy or incompetent, or who

47-11 has not established to the satisfaction of the commissioner that he is

47-12 qualified therefor in accordance with this chapter.

47-13 Sec. 63.5. NRS 697.100 is hereby amended to read as follows:

47-14 697.100 1. Except as otherwise provided in this section, no license

47-15 may be issued:

47-16 (a) Except in compliance with this chapter.

47-17 (b) To a bail agent, bail enforcement agent or bail solicitor, unless he is

47-18 a natural person.

47-19 2. A corporation may be licensed as a bail agent or bail enforcement

47-20 agent if [ownership] :

47-21 (a) The corporation is owned and controlled by an insurer authorized

47-22 to write surety in this state or a subsidiary corporation of such an

47-23 insurer; or

47-24 (b) Ownership and control of the corporation is retained by one or more

47-25 licensed agents.

47-26 3. This section does not prohibit two or more licensed bail agents from

47-27 entering into a partnership for the conduct of their bail business. No person

47-28 may be a member of such a partnership unless he is licensed pursuant to

47-29 this chapter in the same capacity as all other members of the partnership. A

47-30 limited partnership or a natural person may not have any proprietary

47-31 interest, directly or indirectly, in a partnership or the conduct of business

47-32 thereunder except licensed bail agents as provided in this chapter.

47-33 Sec. 64. NRS 697.184 is hereby amended to read as follows:

47-34 697.184 1. An application for a license as a general agent must be

47-35 accompanied by:

47-36 (a) Proof of the completion of a 6-hour course of instruction in bail

47-37 bonds that is:

47-38 (1) Offered by a state or national organization of bail agents or

47-39 another organization that administers training programs for general agents;

47-40 and

47-41 (2) Approved by the commissioner.

47-42 (b) A written appointment by an authorized insurer as general agent,

47-43 subject to the issuance of the license.

48-1 (c) A letter from a local law enforcement agency in the applicant’s

48-2 county of residence which indicates that the applicant:

48-3 (1) Has not been convicted of a felony in this state or of any offense

48-4 committed in another state which would be a felony if committed in this

48-5 state; and

48-6 (2) Has not been convicted of an offense involving moral turpitude or

48-7 the unlawful use, sale or possession of a controlled substance.

48-8 (d) A copy of the contract or agreement that authorizes the general

48-9 agent to act as general agent for the insurer.

48-10 (e) Any other information the commissioner may require.

48-11 2. If the applicant for a license as a general agent is a firm or

48-12 corporation, the application must include the names of the members,

48-13 officers and directors and designate each natural person who is to exercise

48-14 the authority granted by the license. Each person so designated must furnish

48-15 information about himself as though the application were for an individual

48-16 license.

48-17 Sec. 65. NRS 697.190 is hereby amended to read as follows:

48-18 697.190 1. [Every] Each applicant for a [bail agent’s or bail

48-19 solicitor’s] license as a bail agent, bail solicitor or general agent must file

48-20 with the application, and thereafter maintain in force while so licensed, a

48-21 bond in favor of the people of the State of Nevada executed by an

48-22 authorized surety insurer. The bond may be continuous in form with total

48-23 aggregate liability limited to payment as follows:

48-24 (a) Bail agent $25,000

48-25 (b) Bail solicitor 10,000

48-26 (c) General agent 50,000

48-27 2. The bond must be conditioned upon full accounting and payment to

48-28 the person entitled thereto of money, property or other matters coming into

48-29 the licensee’s possession through bail bond transactions under the license.

48-30 3. The bond must remain in force until released by the commissioner,

48-31 or canceled by the surety. Without prejudice to any liability previously

48-32 incurred under the bond, the surety may cancel the bond upon 30 days’

48-33 advance written notice to the licensee and the commissioner.

48-34 Sec. 65.3. NRS 277.055 is hereby amended to read as follows:

48-35 277.055 1. As used in this section:

48-36 (a) "Medical facility" has the meaning ascribed to it in NRS 449.0151.

48-37 (b) "Nonprofit medical facility" means a nonprofit medical facility in

48-38 this or another state.

48-39 (c) "Public agency" has the meaning ascribed to it in NRS 277.100, and

48-40 includes any municipal corporation.

49-1 2. Any two or more public agencies or nonprofit medical facilities may

49-2 enter into a cooperative agreement for the purchase of insurance or the

49-3 establishment of a self-insurance reserve or fund for coverage under a plan

49-4 of:

49-5 (a) Casualty insurance, as that term is defined in NRS 681A.020;

49-6 (b) Marine and transportation insurance, as that term is defined in NRS

49-7 681A.050;

49-8 (c) Property insurance, as that term is defined in NRS 681A.060;

49-9 (d) Surety insurance, as that term is defined in NRS 681A.070;

49-10 (e) Health insurance, as that term is defined in NRS 681A.030; or

49-11 (f) Insurance for any combination of these kinds.

49-12 3. Every such agreement must:

49-13 (a) Be ratified by formal resolution or ordinance of the governing body

49-14 or board of trustees of each agency or nonprofit medical facility included;

49-15 (b) Be included in the minutes of each governing body or board of

49-16 trustees, or attached in full to the minutes as an exhibit;

49-17 (c) Be submitted to the commissioner of insurance not less than 30 days

49-18 before the date on which the agreement is to become effective for

49-19 approval in the manner provided by NRS 277.150; and

49-20 (d) If a public agency is a party to the agreement, comply with the

49-21 provisions of NRS 277.080 to 277.180, inclusive.

49-22 4. Each participating agency or nonprofit medical facility shall provide

49-23 for any expense to be incurred under any such agreement.

49-24 Sec. 65.5. NRS 287.025 is hereby amended to read as follows:

49-25 287.025 The governing body of any county, school district, municipal

49-26 corporation, political subdivision, public corporation or other public

49-27 agency of the State of Nevada may, in addition to the other powers granted

49-28 in NRS 287.010 and 287.020:

49-29 1. Negotiate and contract with any other such agency or with the

49-30 committee on benefits for the state’s group insurance plan to secure group

49-31 insurance for its officers and employees and their dependents by

49-32 participation in any group insurance plan established or to be established or

49-33 in the state’s group insurance plan . [; and] Each such contract:

49-34 (a) Must be submitted to the commissioner of insurance not less than

49-35 30 days before the date on which the contract is to become effective for

49-36 approval.

49-37 (b) Does not become effective unless approved by the commissioner.

49-38 (c) Shall be deemed to be approved if not disapproved by the

49-39 commissioner of insurance within 30 days after its submission.

49-40 2. To secure group health or life insurance for its officers and

49-41 employees and their dependents, participate as a member of a nonprofit

49-42 cooperative association or nonprofit corporation that has been established

50-1 in this state to secure such insurance for its members from an insurer

50-2 licensed pursuant to the provisions of Title 57 of NRS.

50-3 3. In addition to the provisions of subsection 2, participate as a

50-4 member of a nonprofit cooperative association or nonprofit corporation that

50-5 has been established in this state to:

50-6 (a) Facilitate contractual arrangements for the provision of medical

50-7 services to its members’ officers and employees and their dependents and

50-8 for related administrative services.

50-9 (b) Procure health-related information and disseminate that information

50-10 to its members’ officers and employees and their dependents.

50-11 Sec. 65.7. NRS 287.0434 is hereby amended to read as follows:

50-12 287.0434 The committee on benefits may:

50-13 1. Use its assets to pay the expenses of health care for its members and

50-14 covered dependents, to pay its employees’ salaries and to pay

50-15 administrative and other expenses.

50-16 2. Enter into contracts relating to the administration of a plan of

50-17 insurance, including contracts with licensed administrators and qualified

50-18 actuaries. Each such contract with a licensed administrator:

50-19 (a) Must be submitted to the commissioner of insurance not less than

50-20 30 days before the date on which the contract is to become effective for

50-21 approval as to the reasonableness of administrative charges in relation to

50-22 contributions collected and benefits provided.

50-23 (b) Does not become effective unless approved by the commissioner.

50-24 (c) Shall be deemed to be approved if not disapproved by the

50-25 commissioner of insurance within 30 days after its submission.

50-26 3. Enter into contracts with physicians, surgeons, hospitals, health

50-27 maintenance organizations and rehabilitative facilities for medical, surgical

50-28 and rehabilitative care and the evaluation, treatment and nursing care of

50-29 members and covered dependents.

50-30 4. Enter into contracts for the services of other experts and specialists

50-31 as required by a plan of insurance.

50-32 5. Charge and collect from an insurer, health maintenance

50-33 organization, organization for dental care or nonprofit medical service

50-34 corporation, a fee for the actual expenses incurred by the committee, the

50-35 state or a participating public employer in administering a plan of insurance

50-36 offered by that insurer, organization or corporation.

50-37 Sec. 66. NRS 616B.500 is hereby amended to read as follows:

50-38 616B.500 1. An insurer may enter into a contract to have his plan of

50-39 insurance administered by a third-party administrator.

50-40 2. An insurer shall not enter into a contract with any person for the

50-41 administration of any part of the plan of insurance unless that person

50-42 maintains an office in this state and has a [valid] certificate issued by the

50-43 commissioner pursuant to [NRS 683A.085.] section 14 of this act. The

51-1 system may, as a part of a contract entered into with an organization for

51-2 managed care pursuant to NRS 616B.515, require the organization to act as

51-3 its third-party administrator.

51-4 Sec. 67. NRS 616B.503 is hereby amended to read as follows:

51-5 616B.503 1. A person shall not act as a third-party administrator for

51-6 an insurer without a certificate issued by the commissioner pursuant to

51-7 [NRS 683A.085.] section 14 of this act.

51-8 2. A person who acts as a third-party administrator pursuant to chapters

51-9 616A to 616D, inclusive, or chapter 617 of NRS shall:

51-10 (a) Administer from one or more offices located in this state all of the

51-11 claims arising under each plan of insurance that he administers and

51-12 maintain in those offices all of the records concerning those claims;

51-13 (b) Administer each plan of insurance directly, without subcontracting

51-14 with another third-party administrator; and

51-15 (c) Upon the termination of his contract with an insurer, transfer

51-16 forthwith to a certified third-party administrator chosen by the insurer all of

51-17 the records in his possession concerning claims arising under the plan of

51-18 insurance.

51-19 3. The commissioner may, under exceptional circumstances, waive the

51-20 requirements of subsection 2.

51-21 Sec. 68. NRS 683A.0867, 686C.060 and 686C.085 are hereby

51-22 repealed.

51-23 Sec. 69. Sections 20 and 67 of this act become effective at 12:01 a.m.

51-24 on October 1, 1999.

 

51-25 TEXT OF REPEALED SECTIONS

 

51-26 683A.0867 Standards to be provided in agreement. The

51-27 agreement between the administrator and the insurer shall provide for

51-28 underwriting and other standards pertaining to the business underwritten by

51-29 the insurer.

51-30 686C.060 "Board" defined. "Board" means the board of directors

51-31 of the Nevada Life and Health Insurance Guaranty Association.

51-32 686C.085 "Domiciliary state" defined. "Domiciliary state" has the

51-33 meaning ascribed to it in NRS 696B.070.

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