Senate Bill No. 133–Committee on Commerce and Labor

(On Behalf of Legislative Committee on
Workers’ Compensation)

February 5, 1999

____________

Referred to Committee on Commerce and Labor

 

SUMMARY—Establishes provisions governing consolidated insurance programs. (BDR 53-384)

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 industrial insurance; authorizing certain private companies, public entities and utilities to establish and administer a consolidated insurance program to obtain industrial insurance coverage for a construction project; providing certain limitations regarding the scope of a consolidated insurance program; authorizing the state indurstrial insurance system or certain private carriers to provide industrial insurance coverage for a consolidated insurance program; requiring that a consolidated insurance program must provide for the safety and administration of claims of employees of contractors and subcontractors who are engaged in a construction project; setting forth the provisions that must be included within a contract to provide industrial insurance coverage for a consolidated insurance program; allocating responsibility for the payment of claims for industrial insurance that are covered by a consolidated insurance program; 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 616A of NRS is hereby amended by adding thereto

1-2 the provisions set forth as sections 2, 3 and 4 of this act.

1-3 Sec. 2. "Consolidated insurance program" means a program of

1-4 insurance that provides, for a specified period:

1-5 1. Industrial insurance coverage;

1-6 2. A comprehensive program of safety; and

1-7 3. For the administration of claims for industrial insurance,

2-1 for each employee of a contractor or subcontractor who is engaged in a

2-2 construction project when such an employee works at the site of the

2-3 construction project.

2-4 Sec. 3. "Contractor-controlled insurance program" means a

2-5 consolidated insurance program that is established and administered by

2-6 the principal contractor of the construction project.

2-7 Sec. 4. "Owner-controlled insurance program" means a

2-8 consolidated insurance program that is established and administered by

2-9 the owner of the construction project.

2-10 Sec. 5. NRS 616A.020 is hereby amended to read as follows:

2-11 616A.020 1. The rights and remedies provided in chapters 616A to

2-12 616D, inclusive, of NRS for an employee on account of an injury by

2-13 accident sustained arising out of and in the course of the employment shall

2-14 be exclusive, except as otherwise provided in those chapters, of all other

2-15 rights and remedies of the employee, his personal or legal representatives,

2-16 dependents or next of kin, at common law or otherwise, on account of such

2-17 injury.

2-18 2. The terms, conditions and provisions of chapters 616A to 616D,

2-19 inclusive, of NRS for the payment of compensation and the amount thereof

2-20 for injuries sustained or death resulting from such injuries shall be

2-21 conclusive, compulsory and obligatory upon both employers and

2-22 employees coming within the provisions of those chapters.

2-23 3. The exclusive remedy provided by this section to a principal

2-24 contractor extends, with respect to any injury by accident sustained by an

2-25 employee of any contractor in the performance of the contract, to every

2-26 architect, land surveyor or engineer who performs services for:

2-27 (a) The contractor;

2-28 (b) The owner of the property; or

2-29 (c) Any such beneficially interested persons.

2-30 4. The exclusive remedy provided by this section applies to the owner

2-31 of a construction project who provides industrial insurance coverage for

2-32 the project by establishing and administering a consolidated insurance

2-33 program pursuant to section 8 of this act to the extent that the program

2-34 covers the employees of the contractors and subcontractors who are

2-35 engaged in the construction of the project.

2-36 5. If an employee receives any compensation or accident benefits under

2-37 chapters 616A to 616D, inclusive, of NRS, the acceptance of such

2-38 compensation or benefits shall be in lieu of any other compensation, award

2-39 or recovery against his employer under the laws of any other state or

2-40 jurisdiction and such employee is barred from commencing any action or

2-41 proceeding for the enforcement or collection of any benefits or award under

2-42 the laws of any other state or jurisdiction.

3-1 Sec. 6. NRS 616A.025 is hereby amended to read as follows:

3-2 616A.025 As used in chapters 616A to 616D, inclusive, of NRS,

3-3 unless the context otherwise requires, the words and terms defined in NRS

3-4 616A.030 to 616A.360, inclusive, and sections 2, 3 and 4 of this act, have

3-5 the meanings ascribed to them in those sections.

3-6 Sec. 6.5. NRS 616A.230 is hereby amended to read as follows:

3-7 616A.230 "Employer" means:

3-8 1. The state, and each county, city, school district, and all public and

3-9 quasi-public corporations therein without regard to the number of persons

3-10 employed.

3-11 2. Every person, firm, voluntary association, and private corporation,

3-12 including any public service corporation, which has in service any person

3-13 under a contract of hire.

3-14 3. The legal representative of any deceased employer.

3-15 4. The Nevada rural housing authority.

3-16 5. An owner or principal contractor who establishes and administers

3-17 a consolidated insurance program pursuant to section 8 of this act, with

3-18 respect to the employees covered under that consolidated insurance

3-19 program.

3-20 Sec. 7. Chapter 616B of NRS is hereby amended by adding thereto the

3-21 provisions set forth as sections 8 to 21, inclusive, of this act.

3-22 Sec. 8. 1. A private company, public entity or utility may:

3-23 (a) Establish and administer a consolidated insurance program to

3-24 provide industrial insurance coverage for employees of contractors and

3-25 subcontractors who are engaged in a construction project of which the

3-26 private company, public entity or utility is the owner or principal

3-27 contractor, if the estimated total cost of the construction project is equal

3-28 to or greater than the threshold amount established by the commissioner

3-29 pursuant to subsection 3; and

3-30 (b) As a condition precedent to the award of a contract to perform

3-31 work on the construction project, require that contractors and

3-32 subcontractors who will be engaged in the construction of the project

3-33 participate in the consolidated insurance program.

3-34 2. If a private company, public entity or utility:

3-35 (a) Establishes and administers a consolidated insurance program;

3-36 and

3-37 (b) Pursuant to the contract for the construction of the project, owes a

3-38 periodic payment to a contractor or subcontractor whose employees are

3-39 covered under the consolidated insurance program,

3-40 the private company, public entity or utility shall not withhold such a

3-41 periodic payment on the basis that the contractor or subcontractor has

3-42 not signed an employer’s report of industrial injury or occupational

3-43 disease as required pursuant to NRS 616C.045.

4-1 3. The commissioner shall establish the threshold amount that the

4-2 estimated total cost of a construction project must be equal to or greater

4-3 than before a consolidated insurance program may be established and

4-4 administered for that project pursuant to this section. The base amount

4-5 for the threshold must initially be $150,000,000 and thereafter must be

4-6 an amount equal to $150,000,000 as adjusted by the commissioner on

4-7 June 30 of each year to reflect the present value of that amount with

4-8 respect to the construction cost index.

4-9 4. As used in this section:

4-10 (a) "Construction cost index" means the construction cost index

4-11 published by the Engineering News-Record as a measure of inflation.

4-12 (b) "Estimated total cost" means the estimated cost to complete all

4-13 parts of a construction project, including, without limitation, the cost of:

4-14 (1) Designing the project;

4-15 (2) Acquiring the real property on which the project will be

4-16 constructed;

4-17 (3) Connecting the project to utilities;

4-18 (4) Excavating and carrying out underground improvements for the

4-19 project; and

4-20 (5) Acquiring equipment and furnishings for the project.

4-21 The term does not include the cost of any fees or charges associated with

4-22 acquiring the money necessary to complete the project.

4-23 Sec. 9. (Deleted by amendment.)

4-24 Sec. 10. A consolidated insurance program must not cover more

4-25 than one construction project.

4-26 Sec. 11. A consolidated insurance program may cover more than

4-27 one construction project.

4-28 Sec. 12. 1. The system or a private carrier who is authorized to

4-29 transact industrial insurance in this state may contract with a private

4-30 company, public entity or utility to provide industrial insurance coverage

4-31 for a consolidated insurance program.

4-32 2. A private company, public entity or utility that enters into a

4-33 contract with the system or a private carrier for the provision of

4-34 industrial insurance coverage for a consolidated insurance program

4-35 shall file a copy of the contract with the commissioner at least 60 days

4-36 before the date on which the construction project is scheduled to begin.

4-37 3. The commissioner shall, within 60 days after receiving a copy of a

4-38 contract pursuant to subsection 2, review and approve or disapprove the

4-39 contract. If the commissioner does not disapprove the contract within 60

4-40 days after receiving it, the contract shall be deemed approved.

4-41 Sec. 13. 1. A consolidated insurance program that a private

4-42 company, public entity or utility is authorized to establish and administer

4-43 pursuant to section 8 of this act must, in the manner set forth in this

5-1 section, provide for the safety of an employee of a contractor or

5-2 subcontractor who is engaged in the construction project when such an

5-3 employee works at the site of the construction project.

5-4 2. The owner or principal contractor of the construction project shall

5-5 develop and carry out a safety program that includes, without limitation:

5-6 (a) The establishment of minimum standards of safety to be observed

5-7 during construction of the project;

5-8 (b) The holding of regular meetings to address and discuss issues

5-9 related to safety;

5-10 (c) Training of contractors and subcontractors regarding issues and

5-11 procedures related to safety;

5-12 (d) Regular inspections of the site of the construction project to

5-13 identify potential safety hazards and ensure that minimum standards of

5-14 safety are being observed;

5-15 (e) The notification of contractors and subcontractors of special

5-16 hazards that exist at the site of the construction project, including advice

5-17 on ways in which the contractors and subcontractors can avoid those

5-18 hazards; and

5-19 (f) The prompt investigation of any injuries that take place at the site

5-20 of the construction project which result in death or serious bodily injury.

5-21 3. The owner or principal contractor of the construction project shall

5-22 hire or contract with two persons to serve as the primary and alternate

5-23 coordinators for safety for the construction project. The primary and

5-24 alternate coordinators for safety must:

5-25 (a) Possess credentials in the field of safety that the administrator

5-26 determines to be adequate to prepare a person to act as a coordinator for

5-27 safety for a construction project, including, without limitation,

5-28 credentials issued by the:

5-29 (1) Board of Certified Safety Professionals; or

5-30 (2) Insurance Institute of America; or

5-31 (b) Have at least 3 years of experience in overseeing matters of

5-32 occupational safety and health in the field of construction that the

5-33 administrator determines to be adequate to prepare a person to act as a

5-34 coordinator for safety for a construction project.

5-35 4. The primary and alternate coordinators for safety for the

5-36 construction project:

5-37 (a) Must not serve as coordinators for safety for another construction

5-38 project that is covered by a different consolidated insurance program;

5-39 (b) Shall oversee and enforce the safety program established pursuant

5-40 to subsection 2, including, without limitation, resolving problems related

5-41 to the operation of the safety program; and

5-42 (c) Shall ensure that the contractors, employers and subcontractors

5-43 who are engaged in the construction of the project coordinate their

6-1 efforts regarding issues of occupational safety and health to create and

6-2 maintain a safe and healthful workplace.

6-3 5. The alternate coordinator for safety shall report to the primary

6-4 coordinator for safety regarding activities that take place at the site of the

6-5 construction project when the primary coordinator is absent.

6-6 6. The owner or principal contractor of the construction project shall

6-7 ensure that the primary or alternate coordinator for safety for the

6-8 construction project is physically present at the site of the construction

6-9 project whenever activity related to construction is taking place at the

6-10 site.

6-11 Sec. 14. A consolidated insurance program that a private company,

6-12 public entity or utility is authorized to establish and administer pursuant

6-13 to section 8 of this act must, in the manner set forth in this section,

6-14 provide for the administration of claims for industrial insurance for an

6-15 employee of a contractor or subcontractor who is engaged in the

6-16 construction project when such an employee works at the site of the

6-17 construction project.

6-18 2. The owner or principal contractor of the construction project shall

6-19 hire or contract with a person to serve as the administrator of claims for

6-20 industrial insurance for the construction project. Such a person must not

6-21 serve as an administrator of claims for industrial insurance for another

6-22 construction project that is covered by a different consolidated insurance

6-23 program.

6-24 3. The administrator of claims for industrial insurance for the

6-25 construction project who is hired or with whom the owner or principal

6-26 contractor contracts pursuant to subsection 2 shall:

6-27 (a) Assist an employee who is covered under the consolidated

6-28 insurance program or, in the event of the employee’s death, one of his

6-29 dependents, in filing a written notice of injury or death as required

6-30 pursuant to NRS 616C.015 or a written notice of an occupational disease

6-31 as required pursuant to NRS 617.342;

6-32 (b) Sign and file on behalf of a contractor or subcontractor whose

6-33 employees are covered under the consolidated insurance program an

6-34 employer’s report of industrial injury or occupational disease as required

6-35 pursuant to NRS 616C.045 or 617.354;

6-36 (c) Ensure that an employee who is covered under the consolidated

6-37 insurance program and who has been injured or who has incurred an

6-38 occupational disease while working on the construction project is

6-39 directed to a medical facility that will provide treatment to the employee

6-40 under the program;

6-41 (d) Handle all issues, to the extent reasonably practicable, relating to

6-42 claims for industrial insurance at the site of the construction project; and

7-1 (e) Hire or contract such assistant administrators as may be necessary

7-2 to carry out his responsibilities pursuant to this section.

7-3 4. The owner or principal contractor of the construction project shall

7-4 ensure that the administrator of claims for industrial insurance for the

7-5 construction project or an assistant administrator is physically present at

7-6 the site of the construction project whenever activity related to

7-7 construction is taking place at the site.

7-8 Sec. 15. (Deleted by amendment.)

7-9 Sec. 16. 1. A consolidated insurance program must not provide

7-10 industrial insurance coverage, a comprehensive program of safety or for

7-11 the administration of claims for industrial insurance for an employee of

7-12 a contractor or subcontractor who is engaged in the construction of the

7-13 project that is covered by the consolidated insurance program at any time

7-14 that such an employee does not work at the site of the construction

7-15 project.

7-16 2. A contractor or subcontractor who is engaged in the construction

7-17 of a project that is covered by a consolidated insurance program shall

7-18 maintain separate industrial insurance coverage for its employees who:

7-19 (a) Are not assigned to participate in the construction of the project;

7-20 or

7-21 (b) Are assigned to participate in the construction of the project but

7-22 who do not work at the site of the project.

7-23 3. The owner or principal contractor of a construction project shall

7-24 reimburse a contractor or subcontractor who bids successfully on the

7-25 construction project for the cost of providing separate industrial

7-26 insurance coverage for an employee if:

7-27 (a) The contractor or subcontractor set the amount of his bid in a

7-28 reasonable, good faith belief that the employee would work at the site of

7-29 the construction project and would therefore be covered by the

7-30 consolidated insurance program; and

7-31 (b) Because of changed circumstances not reasonably foreseeable at

7-32 the time the bid was submitted, the employee worked in whole or in part

7-33 at a location other than the site of the construction project, requiring the

7-34 contractor or subcontractor to obtain separate industrial insurance

7-35 coverage for that employee.

7-36 Sec. 17. If an owner or principal contractor establishes and

7-37 administers a consolidated insurance program pursuant to section 8 of

7-38 this act, each employee who is covered under the consolidated insurance

7-39 program shall be deemed to be an employee of the owner or principal

7-40 contractor for the purpose of determining the loss experience of the

7-41 owner or principal contractor.

8-1 Sec. 18. With respect to a construction project for which the owner

8-2 intends to establish and administer an owner-controlled insurance

8-3 program or the principal contractor intends to establish and administer a

8-4 contractor-controlled insurance program, the owner or principal

8-5 contractor, as appropriate, shall:

8-6 1. In the notice or advertisement for bids for the construction of the

8-7 project, state:

8-8 (a) That the employees of contractors and subcontractors who are

8-9 engaged in the construction of the project will be covered under a

8-10 consolidated insurance program when such employees work at the site of

8-11 the project; and

8-12 (b) Whether such a program will be an owner-controlled insurance

8-13 program or a contractor-controlled insurance program; and

8-14 2. Hold a pre-bid conference at which it provides to potential

8-15 contractors and subcontractors, without limitation, the following

8-16 information:

8-17 (a) A general explanation of the manner in which a consolidated

8-18 insurance program operates;

8-19 (b) An overview of the provisions of sections 8 to 21, inclusive, of this

8-20 act;

8-21 (c) A general description of the safety procedures that will be required

8-22 as part of the consolidated insurance program; and

8-23 (d) The procedures pursuant to which claims for industrial insurance

8-24 will be administered.

8-25 Sec. 19. The system or a private carrier who contracts to provide

8-26 industrial insurance coverage for a consolidated insurance program

8-27 pursuant to section 12 of this act is liable to pay each claim for industrial

8-28 insurance that is covered by the program, regardless of whether:

8-29 1. The claim is filed after the completion of the construction project;

8-30 or

8-31 2. Any party to the contract is not transacting business within this

8-32 state at the time the claim is filed.

8-33 Sec. 20. A contract for the provision of industrial insurance that is

8-34 authorized pursuant to section 12 of this act must include, without

8-35 limitation:

8-36 1. Provisions that require compliance with each of the requirements

8-37 relating to safety and the administration of claims for industrial

8-38 insurance at the site of the construction project that are set forth in

8-39 sections 13 and 14 of this act;

8-40 2. The names and qualifications of the persons appointed to oversee

8-41 issues of safety and the administration of claims for industrial insurance

8-42 at the site of the construction project pursuant to sections 13 and 14 of

8-43 this act;

9-1 3. The terms and conditions pursuant to which the contract provides

9-2 industrial insurance coverage. The terms and conditions must include,

9-3 without limitation:

9-4 (a) A definition of the site of the construction project that:

9-5 (1) Delineates clearly the area within which coverage is provided;

9-6 and

9-7 (2) Is reasonably contiguous to the actual physical site of the

9-8 construction project; and

9-9 (b) A description of the scope and details of the construction project

9-10 and the duration of industrial insurance coverage that is provided for the

9-11 project;

9-12 4. A list in which the owner, principal contractor, construction

9-13 manager, contractors and subcontractors of the construction project are

9-14 set forth as named insureds; and

9-15 5. A provision setting forth the penalties to which the owner,

9-16 principal contractor, construction manager, contractors and

9-17 subcontractors of the construction project may be subject if such persons

9-18 or entities fail to comply with the provisions relating to safety and the

9-19 administration of claims for industrial insurance that are required

9-20 pursuant to sections 13 and 14 of this act.

9-21 Sec. 21. The commissioner may adopt such regulations as the

9-22 commissioner determines are necessary to carry out the provisions of

9-23 sections 8 to 21, inclusive, of this act, to the extent that the authority

9-24 granted pursuant to this section does not duplicate authority granted to

9-25 the administrator.

9-26 Sec. 22. NRS 616B.612 is hereby amended to read as follows:

9-27 616B.612 1. Every employer within the provisions of chapters 616A

9-28 to 616D, inclusive, or 617 of NRS, and those employers who accept the

9-29 terms of those chapters and are governed by their provisions, shall provide

9-30 and secure compensation according to the terms, conditions and provisions

9-31 of those chapters for any personal injuries by accident sustained by an

9-32 employee arising out of and in the course of the employment.

9-33 2. A contractor or subcontractor shall be deemed to have provided

9-34 and secured compensation for his employees as required pursuant to

9-35 subsection 1 to the extent that those employees are covered by a

9-36 consolidated insurance program.

9-37 3. Travel for which an employee receives wages shall, for the purposes

9-38 of chapters 616A to 616D, inclusive, of NRS, be deemed in the course of

9-39 employment.

9-40 [3.] 4. In such cases the employer or any insurer of the employer is

9-41 relieved from other liability for recovery of damages or other compensation

9-42 for those personal injuries unless otherwise provided by the terms of

9-43 chapters 616A to 616D, inclusive, of NRS.

10-1 Sec. 23. NRS 616C.045 is hereby amended to read as follows:

10-2 616C.045 1. [Within] Except as otherwise provided in section 14 of

10-3 this act, within 6 working days after the receipt of a claim for

10-4 compensation from a physician or chiropractor, an employer shall complete

10-5 and file with his insurer or third-party administrator an employer’s report of

10-6 industrial injury or occupational disease.

10-7 2. The report must:

10-8 (a) Be on a form prescribed by the administrator;

10-9 (b) Be signed by the employer or his designee;

10-10 (c) Contain specific answers to all questions required by the regulations

10-11 of the administrator; and

10-12 (d) Be accompanied by a statement of the wages of the employee if the

10-13 claim for compensation received from the treating physician or chiropractor

10-14 indicates that the injured employee is expected to be off work for 5 days or

10-15 more.

10-16 3. An employer who files the report required by subsection 1 by

10-17 electronic transmission shall, upon request, mail to the insurer or third-

10-18 party administrator the form that contains the original signature of the

10-19 employer or his designee. The form must be mailed within 7 days after

10-20 receiving such a request.

10-21 4. The administrator shall impose an administrative fine of not more

10-22 than $1,000 on an employer for each violation of this section.

10-23 Sec. 24. NRS 617.354 is hereby amended to read as follows:

10-24 617.354 1. [Within] Except as otherwise provided in section 14 of

10-25 this act, within 6 working days after the receipt of a claim for

10-26 compensation from a physician or chiropractor, an employer shall complete

10-27 and file with his insurer or third-party administrator an employer’s report of

10-28 industrial injury or occupational disease.

10-29 2. The report must:

10-30 (a) Be on a form prescribed by the administrator;

10-31 (b) Be signed by the employer or his designee;

10-32 (c) Contain specific answers to all questions required by the regulations

10-33 of the department; and

10-34 (d) Be accompanied by a statement of the wages of the employee if the

10-35 claim for compensation received from the treating physician or chiropractor

10-36 indicates that the employee is expected to be off work for 5 days or more.

10-37 3. An employer who files the report required by subsection 1 by

10-38 electronic transmission shall, upon request, mail to the insurer or third-

10-39 party administrator the form that contains the original signature of the

10-40 employer or his designee. The form must be mailed within 7 days after

10-41 receiving such a request.

10-42 4. The administrator shall impose an administrative fine of not more

10-43 than $1,000 against an employer for each violation of this section.

11-1 Sec. 25. NRS 686A.200 is hereby amended to read as follows:

11-2 686A.200 1. [No] Except as otherwise provided in section 8 of this

11-3 act, no person shall require, directly or indirectly, or through any trustee,

11-4 director, officer, agent or employee or affiliate, as a condition, agreement

11-5 or understanding to selling or furnishing any other person any loan, or

11-6 extension thereof, credit, sale, goods, property, contract, lease or service,

11-7 that such other person shall place, continue (other than as to life insurance)

11-8 or renew any policy of insurance of any kind through any particular agent,

11-9 broker or insurer. No agent, broker or insurer shall knowingly participate in

11-10 any such prohibited plan or transaction. No person shall fix a price charged

11-11 for such thing or service, or discount from or rebate upon price, on the

11-12 condition, agreement or understanding that any insurance is to be obtained

11-13 through a particular agent, broker or insurer.

11-14 2. Subsection 1 does not prevent:

11-15 (a) The exercise by any such person upon a reasonable basis of any right

11-16 to approve or disapprove of the insurer and representative to underwrite the

11-17 insurance. Such basis shall relate only to the adequacy and terms of the

11-18 coverage with respect to the interest of the vendor, lender, lessor or

11-19 provider of service to be insured thereunder, the financial standards to be

11-20 met by the insurer, and the ability of the insurer or representative to service

11-21 the policy.

11-22 (b) The exercise by the vendor, lender, lessor or provider of service of

11-23 the right to furnish or renew the insurance, and to charge the account of the

11-24 other person with the costs thereof, if such other person fails to deliver such

11-25 insurance to the lender, vendor, lessor or provider of service, where

11-26 otherwise called for and in order, at least 15 days prior to expiration of the

11-27 existing policy.

11-28 Sec. 26. NRS 686A.220 is hereby amended to read as follows:

11-29 686A.220 1. [No] Except as otherwise provided in section 8 of this

11-30 act, no officer or employee of this state, or of any public agency, public

11-31 authority or public corporation (except a public corporation or public

11-32 authority created pursuant to agreement or compact with another state), and

11-33 no person acting or purporting to act on behalf of such officer or employee,

11-34 or public agency or public authority or public corporation, shall, with

11-35 respect to any public building or construction contract which is about to be

11-36 or which has been competitively bid, require the bidder to make application

11-37 or furnish financial data to, or to obtain or procure any of the surety bonds

11-38 or contracts of insurance specified in connection with such contracts or by

11-39 any law from, a particular insurer or agent or broker.

11-40 2. [No] Except as otherwise provided in section 8 of this act, no such

11-41 officer or employee or any person acting or purporting to act on behalf of

11-42 such officer or employee shall negotiate, make application for, obtain or

11-43 procure any of such surety bonds or contracts of insurance (except

12-1 contracts of insurance for builder’s risk or owner’s protective liability)

12-2 which can be obtained or procured by the bidder, contractor or

12-3 subcontractor.

12-4 3. This section does not, however, prevent the exercise by such officer

12-5 or employee on behalf of the state or such public agency, public authority

12-6 or public corporation of its right to approve the form, sufficiency or manner

12-7 of execution of the surety bonds or contracts of insurance furnished by the

12-8 insurer selected by the bidder to underwrite such bonds or contracts of

12-9 insurance.

12-10 4. Any provisions in any invitation for bids or in any of the contract

12-11 documents in conflict with this section are declared to be contrary to the

12-12 public policy of this state.

12-13 5. A violation of this section is subject to the penalties provided by

12-14 NRS 679A.180 (general penalty).

12-15 Sec. 26.5. Sections 68.8 and 140 of Senate Bill No. 37 of this session

12-16 are hereby amended to read as follows:

12-17 Sec. 68.8. NRS 616D.120 is hereby amended to read as

12-18 follows:

12-19 616D.120 1. Except as otherwise provided in this section, if

12-20 the administrator determines that an insurer, organization for

12-21 managed care, health care provider, third-party administrator or

12-22 employer has:

12-23 (a) Through fraud, coercion, duress or undue influence:

12-24 (1) Induced a claimant to fail to report an accidental injury or

12-25 occupational disease;

12-26 (2) Persuaded a claimant to settle for an amount which is less

12-27 than reasonable;

12-28 (3) Persuaded a claimant to settle for an amount which is less

12-29 than reasonable while a hearing or an appeal is pending; or

12-30 (4) Persuaded a claimant to accept less than the compensation

12-31 found to be due him by a hearing officer, appeals officer, court of

12-32 competent jurisdiction, written settlement agreement, written

12-33 stipulation or the division when carrying out its duties pursuant to

12-34 chapters 616A to 617, inclusive, of NRS;

12-35 (b) Refused to pay or unreasonably delayed payment to a

12-36 claimant of compensation found to be due him by a hearing officer,

12-37 appeals officer, court of competent jurisdiction, written settlement

12-38 agreement, written stipulation or the division when carrying out its

12-39 duties pursuant to chapters 616A to 616D, inclusive, or chapter 617

12-40 of NRS, if the refusal or delay occurs:

12-41 (1) Later than 10 days after the date of the settlement

12-42 agreement or stipulation;

13-1 (2) Later than 30 days after the date of the decision of a court,

13-2 hearing officer, appeals officer or division, unless a stay has been

13-3 granted; or

13-4 (3) Later than 10 days after a stay of the decision of a court,

13-5 hearing officer, appeals officer or division has been lifted;

13-6 (c) Refused to process a claim for compensation pursuant to

13-7 chapters 616A to 616D, inclusive, or chapter 617 of NRS;

13-8 (d) Made it necessary for a claimant to initiate proceedings

13-9 pursuant to chapters 616A to 616D, inclusive, or chapter 617 of

13-10 NRS for compensation found to be due him by a hearing officer,

13-11 appeals officer, court of competent jurisdiction, written settlement

13-12 agreement, written stipulation or the division when carrying out its

13-13 duties pursuant to chapters 616A to 616D, inclusive, or chapter 617

13-14 of NRS;

13-15 (e) Failed to comply with the division’s regulations covering the

13-16 payment of an assessment relating to the funding of costs of

13-17 administration of chapters 616A to 617, inclusive, of NRS;

13-18 (f) Failed to provide or unreasonably delayed payment to an

13-19 injured employee or reimbursement to an insurer pursuant to NRS

13-20 616C.165; or

13-21 (g) Intentionally failed to comply with any provision of, or

13-22 regulation adopted pursuant to, this chapter or chapter 616A, 616B,

13-23 616C or 617 of NRS,

13-24 the administrator shall impose an administrative fine of $1,000 for

13-25 each initial violation, or a fine of $10,000 for a second or

13-26 subsequent violation.

13-27 2. Except as otherwise provided in chapters 616A to 616D,

13-28 inclusive, or chapter 617 of NRS, if the administrator determines

13-29 that an insurer, organization for managed care, health care provider,

13-30 third-party administrator or employer has failed to comply with any

13-31 provision of this chapter or chapter 616A, 616B, 616C or 617 of

13-32 NRS, or any regulation adopted pursuant thereto, the administrator

13-33 may take any of the following actions:

13-34 (a) Issue a notice of correction for:

13-35 (1) A minor violation, as defined by regulations adopted by

13-36 the division; or

13-37 (2) A violation involving the payment of compensation in an

13-38 amount which is greater than that required by any provision of this

13-39 chapter or chapter 616A, 616B, 616C or 617 of NRS, or any

13-40 regulation adopted pursuant thereto.

13-41 The notice of correction must set forth with particularity the

13-42 violation committed and the manner in which the violation may be

13-43 corrected. [Nothing in] The provisions of this section [authorizes]

14-1 do not authorize the administrator to modify or negate in any

14-2 manner a determination or any portion of a determination made by a

14-3 hearing officer, appeals officer or court of competent jurisdiction or

14-4 a provision contained in a written settlement agreement or written

14-5 stipulation.

14-6 (b) Impose an administrative fine for:

14-7 (1) A second or subsequent violation for which a notice of

14-8 correction has been issued pursuant to paragraph (a); or

14-9 (2) Any other violation of this chapter or chapter 616A, 616B,

14-10 616C or 617 of NRS, or any regulation adopted pursuant thereto,

14-11 for which a notice of correction may not be issued pursuant to

14-12 paragraph (a).

14-13 The fine imposed may not be greater than $250 for an initial

14-14 violation, or more than $1,000 for any second or subsequent

14-15 violation.

14-16 (c) Order a plan of corrective action to be submitted to the

14-17 administrator within 30 days after the date of the order.

14-18 3. If the administrator determines that a violation of any of the

14-19 provisions of paragraphs (a) to (d), inclusive, of subsection 1 has

14-20 occurred, the administrator shall order the insurer, organization for

14-21 managed care, health care provider, third-party administrator or

14-22 employer to pay to the claimant a benefit penalty in an amount

14-23 [equal to 50 percent of the compensation due or $10,000, whichever

14-24 is less. In no event may a benefit penalty be less than $500. The]

14-25 that is not less than $5,000 and not greater than $25,000. To

14-26 determine the amount of the benefit penalty, the administrator

14-27 shall consider the degree of physical harm suffered by the injured

14-28 employee or his dependents as a result of the violation of

14-29 paragraph (a), (b), (c) or (d) of subsection 1, the amount of

14-30 compensation found to be due the claimant and the number of

14-31 fines and benefit penalties previously imposed against the insurer,

14-32 organization for managed care, health care provider, third-party

14-33 administrator or employer pursuant to this section. If this is the

14-34 third violation within 5 years for which a benefit penalty has been

14-35 imposed against the insurer, organization for managed care,

14-36 health care provider, third-party administrator or employer, the

14-37 administrator shall also consider the degree of economic harm

14-38 suffered by the injured employee or his dependents as a result of

14-39 the violation of paragraph (a), (b), (c) or (d) of subsection 1.

14-40 Except as otherwise provided in this section, the benefit penalty is

14-41 for the benefit of the claimant and must be paid directly to him

14-42 within 10 days after the date of the administrator’s determination. If

14-43 the claimant is the injured employee and he dies before the

15-1 benefit penalty is paid to him, the benefit penalty must be paid to

15-2 his estate. Proof of the payment of the benefit penalty must be

15-3 submitted to the administrator within 10 days after the date of his

15-4 determination unless an appeal is filed pursuant to NRS 616D.140.

15-5 Any compensation to which the claimant may otherwise be entitled

15-6 pursuant to chapters 616A to 616D, inclusive, or chapter 617 of

15-7 NRS must not be reduced by the amount of any benefit penalty

15-8 received pursuant to this subsection.

15-9 4. In addition to any fine or benefit penalty imposed pursuant to

15-10 this section, the administrator may assess against an insurer who

15-11 violates any regulation concerning the reporting of claims

15-12 expenditures used to calculate an assessment an administrative

15-13 penalty of up to twice the amount of any underpaid assessment.

15-14 5. If:

15-15 (a) The administrator determines that a person has violated any

15-16 of the provisions of NRS 616D.200, 616D.220, 616D.240,

15-17 616D.300, 616D.310 or 616D.350 to 616D.440, inclusive; and

15-18 (b) The fraud control unit for industrial insurance established

15-19 pursuant to NRS 228.420 notifies the administrator that the unit will

15-20 not prosecute the person for that violation,

15-21 the administrator shall impose an administrative fine of not more

15-22 than $10,000.

15-23 6. Two or more fines of $1,000 or more imposed in 1 year for

15-24 acts enumerated in subsection 1 must be considered by the

15-25 commissioner as evidence for the withdrawal of:

15-26 (a) A certificate to act as a self-insured employer.

15-27 (b) A certificate to act as an association of self-insured public or

15-28 private employers.

15-29 (c) A certificate of registration as a third-party administrator.

15-30 7. The commissioner may, without complying with the

15-31 provisions of NRS 616B.327 or 616B.431, withdraw the

15-32 certification of a self-insured employer, association of self-insured

15-33 public or private employers or third-party administrator if, after a

15-34 hearing, it is shown that the self-insured employer, association of

15-35 self-insured public or private employers or third-party administrator

15-36 violated any provision of subsection 1.

15-37 Sec. 140. 1. This section, section 27, subsection 1 of section

15-38 127, and sections 128 and 129 of this act become effective upon

15-39 passage and approval.

15-40 2. Subsection 1 of section 132 of this act becomes effective on

15-41 June 1, 1999.

16-1 3. Sections 2, 3, 12.5, 86.1, 86.2, 86.6 to 86.9, inclusive, 96.5,

16-2 116, 122, 126.3, 127.5 , 130 and 135 of this act become effective

16-3 on July 1, 1999.

16-4 [3.] 4. Section 86.4 of this act becomes effective on July 1,

16-5 1999, only if Assembly Bill No. 660 of this session is enacted by

16-6 the legislature.

16-7 [4.] 5. Sections 20.5, 35, 89, 117 and 139.4 of this act become

16-8 effective at 12:01 a.m. on July 1, 1999.

16-9 [5.] 6. Sections 20, 24, 25, 26 and 96 and [subsection 1 of

16-10 section 132] of this act become effective on the date the governor

16-11 issues a proclamation pursuant to subsection 1 of section 129 of this

16-12 act.

16-13 [6.] 7. Sections 29 and 126.5 of this act become effective on

16-14 the date the governor issues a proclamation pursuant to subsection 1

16-15 of section 129 of this act, only if the governor issues the

16-16 proclamation before October 1, 1999.

16-17 [7.] 8. Section 29.5 of this act becomes effective:

16-18 (a) At 12:01 a.m. on October 1, 1999, only if the governor issues
16-19 a proclamation pursuant to subsection 1 of section 129 of this act on

16-20 October 1, 1999; or

16-21 (b) On the date the governor issues a proclamation pursuant to

16-22 subsection 1 of section 129 of this act, only if the governor issues

16-23 the proclamation after October 1, 1999.

16-24 [8.] 9. Sections 49.5, 52.5, 53.5, 57.2, 57.4, 62.1 to 62.5,

16-25 inclusive, 68.2 to 68.8, inclusive, 80.5 and 139.2 of this act become

16-26 effective on January 1, 2000.

16-27 [9.] 10. Sections 1, 4 to 12, inclusive, 13 to 19, inclusive, 21,

16-28 22, 23, 28, 30 to 34, inclusive, 36 to 49, inclusive, 50, 51, 52, 53,

16-29 54 to 57, inclusive, 58 to 62, inclusive, 64 to 68, inclusive, 69 to 80,

16-30 inclusive, 81 to 86, inclusive, 87, 88, 90 to 95, inclusive, 97 to 115,

16-31 inclusive, 118 to 121, inclusive, 123 to 126, inclusive, subsection 2

16-32 of section 127, [130,] 131, subsection 2 of section 132, 133, 134,

16-33 136 to 139, inclusive, and 141 of this act become effective on

16-34 January 1, 2000, only if, on that date, the manager of the state

16-35 industrial insurance system transfers the assets of the state industrial

16-36 insurance system to a domestic mutual insurance company pursuant

16-37 to section 129 of this act.

16-38 [10.] 11. Section 63 of this act becomes effective at 12:01 a.m.

16-39 on January 1, 2000, only if, on that date, the manager of the state

16-40 industrial insurance system transfers the assets of the state industrial

16-41 insurance system to a domestic mutual insurance company pursuant

16-42 to section 129 of this act.

17-1 [11.] 12. Sections 20, 96, 116 and 122 of this act expire by

17-2 limitation on January 1, 2000, if the manager of the state industrial

17-3 insurance system transfers the assets of the state industrial insurance

17-4 system to a domestic mutual insurance company pursuant to section

17-5 129 of this act.

17-6 [12.] 13. Section 8 of this act expires by limitation on June 30,

17-7 2003.

17-8 [13.] 14. Section 100 of this act expires by limitation on May

17-9 1, 2013.

17-10 Sec. 27. 1. This section and section 26.5 of this act become effective

17-11 upon passage and approval.

17-12 2. Sections 1 to 10, inclusive, and 12 to 26, inclusive, of this act

17-13 become effective on October 1, 1999.

17-14 3. Section 10 of this act expires by limitation on September 30, 2001.

17-15 4. Section 11 of this act becomes effective on October 1, 2001.

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