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).

Whereas, The Nevada Legislature hereby declares that this act will be

1-1 Section 1. Chapter 679B of NRS is hereby amended by adding thereto

1-2 the provisions set forth as sections 2 to 6, inclusive, of this act.

1-3 Sec. 2. As used in NRS 679B.153 to 679B.158, inclusive, and

1-4 sections 2 to 6, inclusive, of this act, unless the context otherwise

1-5 requires, the words and terms defined in sections 3 and 4 of this act have

1-6 the meanings ascribed to them in those sections.

2-1 Sec. 3. "Fraud control unit" means the fraud control unit for

2-2 insurance established by the attorney general pursuant to section 25 of

2-3 this act.

2-4 Sec. 4. "Insurance fraud" has the meaning ascribed to it in section

2-5 13 of this act.

2-6 Sec. 5. In accordance with the provisions of this Title, the

2-7 commissioner may conduct an administrative investigation into any act

2-8 or alleged act relating to insurance fraud and may take administrative

2-9 action against any person found to have committed an act relating to

2-10 insurance fraud, including:

2-11 1. Any act or alleged act of insurance fraud described in section 13

2-12 of this act; and

2-13 2. Any act or alleged act in which a person:

2-14 (a) Engages in a racketeering activity in violation of NRS 207.400 or

2-15 any federal statute, if that activity involves the transaction of insurance

2-16 or any other matter subject to regulation pursuant to this Title;

2-17 (b) Acts or fails to act if the person knows that his action or inaction

2-18 will result in the fraudulent conversion of money due an insured or an

2-19 insurer, a reinsurer, a producer, a broker or any agent thereof; or

2-20 (c) Acts, engages in activities or otherwise represents himself as being

2-21 licensed to transact insurance pursuant to this Title if the person does not

2-22 hold a license in good standing as required by the provisions of this Title.

2-23 Sec. 6. 1. The books, records, payroll reports and other documents

2-24 of a person that are pertinent to the investigation of insurance fraud

2-25 must be open to inspection by an investigator for the attorney general in

2-26 order to ascertain the correctness of such information and as may be

2-27 necessary for the attorney general to carry out his duties pursuant to

2-28 section 25 of this act, NRS 679B.153 to 679B.158, inclusive, and sections

2-29 2 to 6, inclusive, of this act, and NRS 686A.281 to 686A.295, inclusive,

2-30 and sections 13 to 16, inclusive, of this act.

2-31 2. If a person refuses to produce any book, record, payroll report or

2-32 other document in conjunction with an investigation conducted by the

2-33 fraud control unit, the attorney general may issue a subpoena to require

2-34 the production of that document.

2-35 3. If a person refuses to produce any document as required by the

2-36 subpoena, the attorney general may report to the district court by

2-37 petition, setting forth that:

2-38 (a) Due notice has been given of the time and place of the production

2-39 of the document;

2-40 (b) The person has been subpoenaed by the attorney general pursuant

2-41 to this section; and

2-42 (c) The person has failed or refused to produce the document required

2-43 by the subpoena,

3-1 and asking for an order of the court compelling the person to produce

3-2 the document.

3-3 4. Upon such petition, the court shall enter an order directing the

3-4 person to appear before the court at a time and place to be fixed by the

3-5 court in its order, the time to be not more than 10 days after the date of

3-6 the order, and to show cause why he has not produced the document. A

3-7 certified copy of the order must be served upon the person.

3-8 5. If it appears to the court that the subpoena was regularly issued by

3-9 the attorney general, the court shall enter an order that the person

3-10 produce the required document at the time and place fixed in the order.

3-11 Failure to obey the order constitutes contempt of court.

3-12 Sec. 7. NRS 679B.155 is hereby amended to read as follows:

3-13 679B.155 To investigate [fraudulent claims for benefits from a policy

3-30 claims and who request assistance from the commissioner.]

3-31 Sec. 8. NRS 679B.156 is hereby amended to read as follows:

3-32 679B.156 1. Every person in charge of an investigative or law

3-42 this state, any other state or the Federal Government who requests

4-1 assistance in investigating [fraudulent claims against an insurer;] any act of

4-2 insurance fraud; and

4-3 (b) Furnish to those officials any information, not otherwise

4-4 confidential, concerning his investigation or his report on [fraudulent

4-5 claims.] insurance fraud.

4-6 Sec. 9. NRS 679B.157 is hereby amended to read as follows:

4-7 679B.157 An individual, an insurer, an employee or a representative

4-14 claim or suspicious fire.

4-15 Sec. 10. NRS 679B.159 is hereby amended to read as follows:

4-16 679B.159 1. Every insurer, agent, solicitor, broker, administrator or

4-22 the person’s name and the information confidential.

4-23 Sec. 11. NRS 679B.190 is hereby amended to read as follows:

4-24 679B.190 1. The commissioner shall carefully preserve in the

4-43 insurer or the public; or

5-1 (b) A court orders the release of the records or information after

5-2 determining that the production of the records or information will not

5-3 damage any investigation being conducted by the commissioner [.] or the

5-4 fraud control unit.

5-5 4. The commissioner may destroy unneeded or obsolete records and

5-6 filings in the division in accordance with provisions and procedures

5-7 applicable in general to administrative agencies of this state.

5-8 5. The commissioner may classify as confidential certain records and

5-9 information obtained from a governmental agency or other sources upon

5-10 the express condition that they remain confidential.

5-11 6. All information and documents in the possession of [the] :

5-12 (a) The attorney general and the fraud control unit which are related

5-13 to cases or matters under investigation; or

5-14 (b) The division or any of its employees which are related to cases or

5-15 matters under investigation or examination by the commissioner or his
5-16 staff ,

5-17 are confidential for the entire period of the investigation or examination

5-18 and may not be made public unless the commissioner or attorney general,

5-19 as appropriate, finds the existence of an imminent threat of harm to the

5-20 safety or welfare of the policyholder, shareholders or the public and

5-21 determines that the interests of the policyholder, shareholders or the public

5-22 will be served by publication thereof, in which event he may make a record

5-23 public or publish all or any part of the record in any manner he deems

5-24 appropriate.

5-25 Sec. 12. Chapter 686A of NRS is hereby amended by adding thereto

5-26 the provisions set forth as sections 13 to 16, inclusive, of this act.

5-27 Sec. 13. "Insurance fraud" means knowingly and willfully:

5-43 abets, solicits or conspires knows that the statement conceals or omits

6-1 facts, or contains false or misleading information concerning any fact

6-2 material to an application for the issuance of a policy of insurance

6-3 pursuant to this Title or a claim for payment or other benefits under such

6-4 a policy.

6-5 4. Acting or failing to act with the intent of defrauding or deceiving

6-6 an insurer, a reinsurer, a producer, a broker or any agent thereof, in

6-7 order to obtain a policy of insurance pursuant to this Title or any

6-8 proceeds or other benefits under such a policy.

6-9 5. As a practitioner, an insurer or any agent thereof, acting to assist,

6-10 conspire with or urge another person to commit any act or omission

6-11 specified in this section through deceit, misrepresentation or other

6-12 fraudulent means.

6-13 6. Accepting any proceeds or other benefits under a policy of

6-14 insurance issued pursuant to this Title, if the person who accepts the

6-15 proceeds or other benefits knows that the proceeds or other benefits are

6-16 derived from any act or omission specified in this section.

6-17 7. Employing a person to procure clients, patients or other persons

6-18 who obtain services or benefits under a policy of insurance issued

6-19 pursuant to this Title for the purpose of engaging in any act or omission

6-20 specified in this section, except that such insurance fraud does not

6-21 include contact or communication by an insurer or his agent or

6-22 representative with a client, patient or other person if the contact or

6-23 communication is made for a lawful purpose, including, without

6-24 limitation, communication by an insurer with a holder of a policy of

6-25 insurance issued by the insurer or with a claimant concerning the

6-26 settlement of any claims against the policy.

6-27 8. Participating in, aiding, abetting, conspiring to commit, soliciting

6-28 another person to commit, or permitting an employee or agent to commit

6-29 any act or omission specified in this section.

6-30 Sec. 14. "Investigative or law enforcement agency" includes:

6-31 1. The state fire marshal;

6-32 2. The chief or other officer of the fire department in whose

6-33 jurisdiction a fire has occurred;

6-34 3. The district attorney of the county where any fraudulent activity

6-35 has occurred or where a fraudulent claim has been made; and

6-36 4. Any other officer of an agency in this state who has the authority

6-37 to investigate the fraudulent activity or claim.

6-38 Sec. 15. "Practitioner" means:

6-39 1. A physician, dentist, nurse, dispensing optician, optometrist,

6-40 physical therapist, podiatric physician, psychologist, chiropractor, doctor

6-41 of Oriental medicine in any form, director or technician of a medical

6-42 laboratory, pharmacist or other provider of health services who is

7-1 authorized to engage in his occupation by the laws of this state or

7-2 another state; and

7-3 2. An attorney admitted to practice law in this state or any other

7-4 state.

7-5 Sec. 16. 1. A court may, in addition to imposing the penalties set

7-6 forth in NRS 193.130, order a person who is convicted of, or who pleads

7-7 guilty or nolo contendere to, insurance fraud to pay:

7-8 (a) Court costs; and

7-9 (b) The cost of the investigation and prosecution of the insurance

7-10 fraud for which the person was convicted or to which the person pleaded

7-11 guilty or nolo contendere.

7-12 2. An insurer or other organization subject to the jurisdiction of the

7-13 commissioner pursuant to this Title shall be deemed to be a victim for the

7-14 purposes of restitution in a case that involves insurance fraud or that is

7-15 related to a claim of insurance fraud.

7-16 Sec. 17. NRS 686A.281 is hereby amended to read as follows:

7-17 686A.281 As used in NRS 686A.281 to 686A.295, inclusive, and

7-28 sections.

7-29 Sec. 18. NRS 686A.283 is hereby amended to read as follows:

7-30 686A.283 1. Any person, insurer or authorized representative of an

7-43 other violation of the provisions of this Title; and

8-1 (b) Determine whether an investigation should be made of the facts in

8-2 the report.

8-3 3. During his investigation, the commissioner or attorney general, as

8-4 appropriate, shall determine whether there is probable cause to believe that

8-5 [there was deceit, fraud or an intentional misrepresentation of a material

8-6 fact in the claim.] insurance fraud or any other violation of the provisions

8-7 of this Title has occurred.

8-8 4. If the commissioner determines that the provisions of NRS

8-9 686A.010 to 686A.310, inclusive, and sections 13 to 16, inclusive, of this

8-10 act, have been violated he shall report his findings to the district attorney of

8-11 the county where the violation occurred [.] , or to the attorney general.

8-12 5. A district attorney of any county where fraudulent activity has

8-13 occurred or is occurring or where a fraudulent claim has been made

8-14 may, with the permission of the attorney general or at the request of the

8-15 attorney general, institute proceedings in the name of the State of

8-16 Nevada.

8-17 Sec. 19. NRS 686A.285 is hereby amended to read as follows:

8-18 686A.285 1. If an insurer [believes] has a reasonable suspicion that

8-26 the insurer shall also so notify an investigative or law enforcement agency.

8-27 Sec. 20. NRS 686A.287 is hereby amended to read as follows:

8-28 686A.287 1. Every insurer shall provide information [on a fraudulent

8-41 loss or any other relevant information on the claim.

9-1 Sec. 21. NRS 686A.289 is hereby amended to read as follows:

9-2 686A.289 1. Any insurer giving information to the attorney general,

9-19 furnished the information for the investigation or a criminal prosecution.

9-20 Sec. 22. NRS 686A.291 is hereby amended to read as follows:

9-21 686A.291 [1. A person commits insurance fraud if he knowingly and

9-42 benefits under such a policy.

10-1 (e) As a practitioner, an insurer or any agent thereof, acts to assist,

10-2 conspire with or urge another person to violate any provision of this section

10-3 through deceit, misrepresentation or other fraudulent means.

10-4 (f) Accepts any proceeds or other benefits under a policy of insurance

10-5 issued pursuant to this Title known by him to be derived from any act or

10-6 omission which violates any provision of this section.

10-7 (g) Employs a person to procure clients, patients or other persons who

10-8 obtain services or benefits under a policy of insurance issued pursuant to

10-9 this Title for the purpose of engaging in any activity prohibited by this

10-10 section. This paragraph does not prohibit contact or communication by an

10-11 insurer or his agent or representative with a client, patient or other person if

10-12 the contact or communication is made for a lawful purpose, including,

10-13 without limitation, communication by an insurer with a holder of a policy

10-14 of insurance issued by the insurer or with a claimant concerning the

10-15 settlement of any claims against the policy.

10-16 2. A person commits insurance fraud if he knowingly and willfully

10-17 participates in, aids, abets, conspires to commit, solicits another person to

10-18 commit, or permits an employee or agent to commit an act of insurance

10-19 fraud prohibited by subsection 1.

10-20 3.] A person who commits insurance fraud is guilty of a category D

10-21 felony and shall be punished as provided in NRS 193.130.

10-22 [4. For the purposes of this section, "practitioner" means:

10-23 (a) A physician, dentist, nurse, dispensing optician, optometrist, physical

10-24 therapist, podiatric physician, psychologist, chiropractor, doctor of Oriental

10-25 medicine in any form, director or technician of a medical laboratory,

10-26 pharmacist or other provider of health services who is authorized to engage

10-27 in his occupation by the laws of this state or another state; and

10-28 (b) An attorney admitted to practice law in this state or any other state.]

10-29 Sec. 23. NRS 686A.295 is hereby amended to read as follows:

10-30 686A.295 If a person who is licensed or registered under the laws of

10-42 transmittal to the legislature.

11-1 Sec. 24. Chapter 228 of NRS is hereby amended by adding thereto the

11-2 provisions set forth as sections 25 and 26 of this act.

11-3 Sec. 25. 1. The attorney general has primary jurisdiction to

11-4 conduct criminal investigations into and may bring a criminal

11-5 prosecution for any act alleged to be insurance fraud.

11-6 2. The attorney general shall establish within his office a fraud

11-7 control unit for insurance. The fraud control unit must consist of such

11-8 persons as are necessary to carry out the duties set forth in this section,

11-9 NRS 679B.153 to 679B.158, inclusive, and sections 2 to 6, inclusive, of

11-10 this act, and NRS 686A.281 to 686A.291, inclusive, and sections 13 to 16,

11-11 inclusive, of this act, including, without limitation, attorneys and

11-12 investigators.

11-13 3. The attorney general, acting through the fraud control unit:

11-14 (a) Is the single state agency responsible for the criminal prosecution

11-15 of insurance fraud;

11-16 (b) Shall cooperate with the commissioner of insurance, insurers, and

11-17 investigators and prosecutors of other states and the Federal Government

11-18 in coordinating state and federal criminal investigations and criminal

11-19 prosecutions involving insurance fraud;

11-20 (c) Shall protect the privacy of insurers and insured persons who are

11-21 eligible to receive benefits pursuant to the provisions of Title 57 of NRS

11-22 and shall establish procedures to prevent the misuse of information

11-23 obtained in carrying out this section; and

11-24 (d) May, upon written request, inspect the records of any insurer, the

11-25 commissioner of insurance and the division of insurance of the

11-26 department of business and industry to conduct a criminal investigation

11-27 into any act alleged to be insurance fraud.

11-28 4. To investigate any act alleged to be insurance fraud, the attorney

11-29 general and members of the fraud control unit may conduct

11-30 investigations into any activity related thereto occurring outside of this

11-31 state, if necessary. To conduct these investigations, the attorney general

11-32 and members of the fraud control unit may:

11-33 (a) Travel outside of this state;

11-34 (b) Cooperate with appropriate agencies or persons outside this state;

11-35 and

11-36 (c) Designate those agencies or persons to conduct investigations for

11-37 the attorney general.

11-38 5. When acting pursuant to this section, the attorney general may

11-39 commence his investigation and file a criminal action without leave of

11-40 court, and he has exclusive charge of the conduct of the prosecution. The

11-41 attorney general may conduct preliminary hearings or grand juries for

11-42 the purposes of filing an information or indictment.

12-1 6. The attorney general shall report the name of each person who

12-2 has been convicted of insurance fraud to the commissioner of insurance.

12-3 7. Nothing in this section limits the exclusive jurisdiction of the

12-4 commissioner of insurance otherwise granted by statute to investigate or

12-5 take administrative or civil action:

12-6 (a) For any violation of Title 57 of NRS by any person or entity who is

12-7 or has been licensed by the commissioner of insurance pursuant to Title

12-8 57 of NRS;

12-9 (b) Against any person or entity who is or has been engaged in the

12-10 business of insurance without a license as required by Title 57 of NRS,

12-11 including, without limitation, the unauthorized transaction of insurance

12-12 in violation of chapter 685B of NRS; or

12-13 (c) Against any person or entity as the commissioner deems

12-14 appropriate.

12-15 8. As used in this section, "insurance fraud" has the meaning

12-16 ascribed to it in section 13 of this act.

12-17 Sec. 26. 1. Except as otherwise provided in this section, the

12-18 attorney general may temporarily reassign any personnel, or reallocate

12-19 any other resource, among:

12-20 (a) The bureau of consumer protection established pursuant to NRS

12-21 228.310;

12-22 (b) The Medicaid fraud control unit established pursuant to NRS

12-23 228.410;

12-24 (c) The fraud control unit for industrial insurance established

12-25 pursuant to NRS 228.420;

12-26 (d) The fraud control unit for insurance established pursuant to

12-27 section 25 of this act; and

12-28 (e) The program to coordinate activities and information in this state

12-29 concerning missing or exploited children established pursuant to NRS

12-30 432.170.

12-31 2. The attorney general shall not reassign any personnel or

12-32 reallocate any other resource pursuant to this section if the reassignment

12-33 or reallocation:

12-34 (a) Violates any provision of federal law or any agreement between

12-35 the Federal Government, or any agency thereof, and this state or any

12-36 agency or political subdivision thereof; or

12-37 (b) Would result in the loss of federal money or any other benefit

12-38 provided by the Federal Government or any agency thereof.

12-39 Sec. 27. NRS 477.030 is hereby amended to read as follows:

12-40 477.030 1. Except as otherwise provided in this section, the state fire

12-41 marshal shall enforce all laws and adopt regulations relating to:

12-42 (a) The prevention of fire.

12-43 (b) The storage and use of combustibles, flammables and fireworks.

13-1 (c) The storage and use of explosives in any commercial construction,

13-2 but not in mining or the control of avalanches.

13-3 (d) The safety, access, means and adequacy of exit in case of fire from

13-4 mental and penal institutions, facilities for the care of children, foster

13-5 homes, residential facilities for groups, facilities for intermediate care,

13-6 nursing homes, hospitals, schools, all buildings, except private residences,

13-7 which are occupied for sleeping purposes, buildings used for public

13-8 assembly and all other buildings where large numbers of persons work, live

13-9 or congregate for any purpose. As used in this paragraph, "public

13-10 assembly" means a building or a portion of a building used for the

13-11 gathering together of 50 or more persons for purposes of deliberation,

13-12 education, instruction, worship, entertainment, amusement or awaiting

13-13 transportation, or the gathering together of 100 or more persons in

13-14 establishments for drinking or dining.

13-15 (e) The suppression and punishment of arson and fraudulent claims or

13-16 practices in connection with fire losses.

13-17 The regulations of the state fire marshal apply throughout the state, but,

13-18 except with respect to state-owned or state-occupied buildings, his

13-19 authority to enforce them or conduct investigations under this chapter is

13-20 limited to those counties whose population is less than 35,000, except in

13-21 those local jurisdictions in other counties where he is requested to exercise

13-22 that authority by the chief officer of the organized fire department of that

13-23 jurisdiction.

13-24 2. The state fire marshal may set standards for equipment and

13-25 appliances pertaining to fire safety or to be used for fire protection within

13-26 this state, including the threads used on fire hose couplings and hydrant

13-27 fittings.

13-28 3. The state fire marshal shall cooperate with the state forester

13-29 firewarden in the preparation of regulations relating to standards for fire

13-30 retardant roofing materials pursuant to paragraph (e) of subsection 1 of

13-31 NRS 472.040.

13-32 4. The state fire marshal shall cooperate with the division of child and

13-33 family services of the department of human resources in establishing

13-34 reasonable minimum standards for overseeing the safety of and directing

13-35 the means and adequacy of exit in case of fire from family foster homes and

13-36 group foster homes.

13-37 5. The state fire marshal shall coordinate all activities conducted

13-38 pursuant to the Fire Research and Safety Act of 1968, 15 U.S.C. [§§ 278f

13-39 and 278g,] § 278f, and receive and distribute money allocated by the

13-40 United States pursuant to that act.

13-41 6. Except as otherwise provided in subsection 10, the state fire marshal

13-42 shall:

14-1 (a) Investigate any fire which occurs in a county whose population is

14-2 less than 35,000, and from which a death results or which is of a suspicious

14-3 nature.

14-4 (b) Investigate any fire which occurs in a county whose population is

14-5 35,000 or more, and from which a death results or which is of a suspicious

14-6 nature, if requested to do so by the chief officer of the fire department in

14-7 whose jurisdiction the fire occurs.

14-8 (c) Cooperate with the commissioner of insurance , the attorney general

14-9 and the fraud control unit established pursuant to section 25 of this act in

14-10 any investigation of a fraudulent claim under an insurance policy for any

14-11 fire of a suspicious nature.

14-12 (d) Cooperate with any local fire department in the investigation of any

14-13 report received pursuant to NRS 629.045.

14-14 (e) Provide specialized training in investigating the causes of fires if

14-15 requested to do so by the chief officer of an organized fire department.

14-16 7. The state fire marshal shall put the Uniform Fire Incident Reporting

14-17 System into effect throughout the state and publish at least annually a

14-18 summary of data collected under the system.

14-19 8. The state fire marshal shall provide assistance and materials to local

14-20 authorities, upon request, for the establishment of programs for public

14-21 education and other fire prevention activities.

14-22 9. The state fire marshal shall:

14-23 (a) Assist in checking plans and specifications for construction;

14-24 (b) Provide specialized training to local fire departments; and

14-25 (c) Assist local governments in drafting regulations and ordinances,

14-26 on request or as he deems necessary.

14-27 10. In a county whose population is less than 35,000, the state fire

14-28 marshal shall, upon request by a local government, delegate to the local

14-29 government by interlocal agreement all or a portion of his authority or

14-30 duties if the local government’s personnel and programs are, as determined

14-31 by the state fire marshal, equally qualified to perform those functions. If a

14-32 local government fails to maintain the qualified personnel and programs in

14-33 accordance with such an agreement, the state fire marshal shall revoke the

14-34 agreement.

14-35 Sec. 28. This act becomes effective upon passage and approval.