Senate Bill No. 374–Senator Schneider

March 11, 1999

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Referred to Committee on Commerce and Labor

 

SUMMARY—Revises provisions governing associations of self-insured public and private employers. (BDR 53-1171)

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 associations of self-insured public and private employers; eliminating the prohibition against an association’s administrator and its third-party administrator having a financial relationship or being employed by one another; eliminating the prohibition against an association’s administrator performing the duties of the third-party administrator; eliminating the requirement that a person who solicits memberships for an association obtain a permit from the commissioner of insurance; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. NRS 616B.365 is hereby amended to read as follows:

1-2 616B.365 1. An association of self-insured public or private

1-3 employers must be operated by a board of trustees consisting of at least five

1-4 members whom the members of the association elect for terms set forth in

1-5 the bylaws of the association. If the association is an association of self-

1-6 insured:

1-7 (a) Public employers, the members of the board of trustees must be

1-8 officers or employees of the public employers who are members of the

1-9 association.

1-10 (b) Private employers, at least two-thirds of the members of the board of

1-11 trustees must be employees, officers or directors of the members of the

1-12 association. No association’s administrator or third-party administrator

1-13 employed by the association, or any owner, officer, employee or other

1-14 person affiliated with the association’s administrator or third-party

1-15 administrator, may serve as a member of the board of trustees. Each

2-1 member of the board of trustees must be a resident of this state or an officer

2-2 of a corporation authorized to do business in this state.

2-3 2. The board of trustees of an association shall:

2-4 (a) Ensure the prompt payment of any compensation due pursuant to

2-5 chapters 616A to 616D, inclusive, or chapter 617 of NRS.

2-6 (b) Take such actions as are necessary to protect the assets of the

2-7 association.

2-8 (c) Employ full time an association’s administrator to carry out the

2-9 policies of the board of trustees and perform such duties as the board

2-10 delegates to him. [An association’s administrator shall not perform any of

2-11 the duties assigned to a third-party administrator.]

2-12 (d) Employ a third-party administrator to carry out the duties set forth in

2-13 NRS 616B.503.

2-14 (e) Employ an independent certified public accountant to prepare the

2-15 statement of financial condition required by NRS 616B.404.

2-16 (f) Maintain minutes of its meetings and make the minutes available for

2-17 inspection by the commissioner.

2-18 3. The board of trustees of an association shall not:

2-19 (a) Extend credit to any member of the association for the payment of

2-20 that member’s annual assessment, except pursuant to a payment plan

2-21 approved by the commissioner.

2-22 (b) Borrow any money from the association or in the name of the

2-23 association, except in the ordinary course of its business, without the prior

2-24 approval of the commissioner.

2-25 Sec. 2. NRS 616A.315, 616B.371, 616B.374, 616B.377, 616B.380

2-26 and 616B.383 are hereby repealed.

2-27 Sec. 3. This act becomes effective on July 1, 1999.

 

2-28 LEADLINES OF REPEALED SECTIONS

 

2-29 616A.315 "Solicitor" defined.

2-30 616B.371 Association’s administrator prohibited from financial

2-31 interest in third-party administrator; third-party administrator

2-32 prohibited from financial interest in association’s administrator;

2-33 contractual requirement.

2-34 616B.374 Solicitor’s permit: Advertising or offering for sale

2-35 membership in proposed association of self-insured public or private

2-36 employers without permit prohibited; application for permit; fee;

2-37 penalty; exceptions.

3-1 616B.377 Solicitor’s permit: Commissioner to conduct

3-2 investigation after filing of application for permit; required issuance of

3-3 permit; commissioner to give notice to applicant if application denied;

3-4 fee nonrefundable.

3-5 616B.380 Solicitor’s permit: Power of commissioner to suspend or

3-6 revoke permit; hearing required.

3-7 616B.383 Advertisements or written materials to join association

3-8 of self-insured public or private employers; solicitor to provide to

3-9 commissioner upon request copy of document relating to solicitation.

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