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; prohibiting persons from soliciting memberships for an association except under certain circumstances; requiring an association to provide to the commissioner of insurance certain documents relating to solicitation of memberships for an association; 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. Chapter 616B of NRS is hereby amended by adding thereto

1-2 a new section to read as follows:

1-3 A person shall not solicit or recruit an employer to join an association

1-4 of self-insured public or private employers unless he is:

1-5 1. If the association is an association of self-insured private

1-6 employers, an employee of the bona fide trade association to which the

1-7 members of the association belong;

1-8 2. An employee of the administrator of the association of self-insured

1-9 public or private employers;

1-10 3. An employee of a member of the association of self-insured public

1-11 or private employers; or

1-12 4. A licensed insurance agent or broker.

2-1 Sec. 2. NRS 616B.383 is hereby amended to read as follows:

2-2 616B.383 [1. Any advertising or written material that solicits

2-3 employers to join an association of self-insured public or private employers

2-4 must contain the permit number of the solicitor.

2-5 2. A solicitor] An association of self-insured public or private

2-6 employers shall provide to the commissioner upon request a copy of any

2-7 document relating to a solicitation [which was prepared after the solicitor

2-8 filed his application for a permit.] of an employer to join the association.

2-9 Sec. 3. NRS 616B.425 is hereby amended to read as follows:

2-10 616B.425 1. The commissioner may issue an order requiring an

2-11 association of self-insured public or private employers or a member of the

2-12 association to cease and desist from engaging in any act or practice found

2-13 to be in violation of any provision of NRS 616B.350 to 616B.446,

2-14 inclusive, section 1 of this act, or any regulation adopted pursuant thereto.

2-15 2. If the commissioner determines that an association or a member of

2-16 the association has violated an order to cease and desist, the commissioner

2-17 may impose an administrative fine of not more than $10,000 for each

2-18 violation of the order, not to exceed an aggregate amount of $100,000, or

2-19 withdraw the certificate of the association, or both.

2-20 Sec. 4. NRS 616B.428 is hereby amended to read as follows:

2-21 616B.428 1. The commissioner may impose an administrative fine

2-22 for each violation of any provision of NRS 616B.350 to 616B.446,

2-23 inclusive, section 1 of this act, or any regulation adopted pursuant thereto.

2-24 Except as otherwise provided in those sections, the amount of the fine may

2-25 not exceed $1,000 for each violation or an aggregate amount of $10,000.

2-26 2. The commissioner may withdraw the certificate of an association of

2-27 self-insured public or private employers if:

2-28 (a) The association’s certificate was obtained by fraud;

2-29 (b) The application for certification contained a material

2-30 misrepresentation;

2-31 (c) The association is found to be insolvent;

2-32 (d) The association fails to have five or more members;

2-33 (e) The association fails to pay the costs of any examination or any

2-34 penalty, fee or assessment required by the provisions of chapters 616A to

2-35 616D, inclusive, of NRS;

2-36 (f) The association fails to comply with any of the provisions of this

2-37 chapter or chapter 616A, 616C or 616D of NRS, or any regulation adopted

2-38 pursuant thereto;

2-39 (g) The association fails to comply with any order of the commissioner

2-40 within the time prescribed by the provisions of chapters 616A to 616D,

2-41 inclusive, of NRS or in the order of the commissioner; or

3-1 (h) The association or its third-party administrator misappropriates,

3-2 converts, illegally withholds or refuses to pay any money to which a person

3-3 is entitled and that was entrusted to the association in its fiduciary capacity.

3-4 3. If the commissioner withdraws the certification of an association of

3-5 self-insured public or private employers, each employer who is a member

3-6 of the association remains liable for his obligations incurred before and

3-7 after the order of withdrawal.

3-8 4. Any employer who is a member of an association whose certification

3-9 is withdrawn shall, on the effective date of the withdrawal, qualify as an

3-10 employer pursuant to NRS 616B.650.

3-11 Sec. 5. NRS 616A.315, 616B.374, 616B.377 and 616B.380 are

3-12 hereby repealed.

3-13 Sec. 6. This act becomes effective on July 1, 1999.

 

3-14 LEADLINES OF REPEALED SECTIONS

 

3-15 616A.315 "Solicitor" defined.

3-16 616B.374 Solicitor’s permit: Advertising or offering for sale

3-17 membership in proposed association of self-insured public or private

3-18 employers without permit prohibited; application for permit; fee;

3-19 penalty; exceptions.

3-20 616B.377 Solicitor’s permit: Commissioner to conduct

3-21 investigation after filing of application for permit; required issuance of

3-22 permit; commissioner to give notice to applicant if application denied;

3-23 fee nonrefundable.

3-24 616B.380 Solicitor’s permit: Power of commissioner to suspend or

3-25 revoke permit; hearing required.

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