1. Senate Bill No. 38–Committee on Commerce and Labor

CHAPTER........

AN ACT relating to industrial insurance; requiring certain records of an employer who is

insured by a private carrier to be open to inspection by that private carrier;

expanding the types of organizations or associations of employers to which private

carriers may provide industrial insurance; changing the period within which an

insurer must provide notice that an employer has changed insurers or allowed his

industrial insurance to lapse; revising the provisions concerning employee leasing

companies; requiring an insurer to notify certain claimants of circumstances under

which a claim for workers’ compensation may be closed automatically; providing a

penalty; and providing other matters properly relating thereto.

 

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. NRS 616A.465 is hereby amended to read as follows:

  1. 616A.465 1. Except as otherwise provided in this section, the
  1. division shall:
  1. (a) Regulate insurers pursuant to chapters 616A to 617, inclusive, of
  1. NRS; [and]
  1. (b) Investigate insurers regarding compliance with statutes and the
  1. division’s regulations [.] ;
  1. (c) Determine whether an employee leasing company is entitled to a
  1. certificate of registration pursuant to NRS 616B.673; and
  1. (d) Regulate employee leasing companies pursuant to the provisions
  1. of NRS 616B.670 to 616B.697, inclusive.
  1. 2. The commissioner is responsible for reviewing rates, investigating
  1. the solvency of insurers, authorizing private carriers pursuant to chapter
  1. 680A of NRS and certifying:
  1. (a) Self-insured employers pursuant to NRS 616B.300 to 616B.330,
  1. inclusive, and 616B.336;
  1. (b) Associations of self-insured public or private employers pursuant to
  1. NRS 616B.350 to 616B.446, inclusive; and
  1. (c) Third-party administrators pursuant to chapter 683A of NRS.
  1. 3. The department of administration is responsible for contested claims
  1. relating to industrial insurance pursuant to NRS 616C.310 to 616C.385,
  1. inclusive. The administrator is responsible for administrative appeals
  1. pursuant to NRS 616B.215.
  1. 4. The Nevada attorney for injured workers is responsible for legal
  1. representation of claimants pursuant to NRS 616A.435 to 616A.460,
  1. inclusive, and 616D.120.

5. The division is responsible for the investigation of complaints. If a

complaint is filed with the division, the administrator shall cause to be

conducted an investigation which includes a review of relevant records and

interviews of affected persons. If the administrator determines that a

violation may have occurred, the administrator shall proceed in accordance

with the provisions of NRS 616D.120 and 616D.130.

6. As used in this section, "employee leasing company" has the

meaning ascribed to it in NRS 616B.670.

Sec. 2. NRS 616A.485 is hereby amended to read as follows:

  1. 616A.485 1. The books, records and payrolls of an employer insured
  1. by the system must be open to inspection by the administrator, the system or
  1. its auditor or agent or by auditors of the department of taxation to
  1. determine:
  1. (a) The accuracy of the payroll;
  1. (b) The number of persons employed; and
  1. (c) Any other information necessary for the administration of chapters
  1. 616A to 617, inclusive, of NRS.
  1. 2. The books, records and payroll of an employer who is self-insured, a
  1. member of an association of self-insured public or private employers or
  1. insured by a private carrier must be open to inspection by the administrator
  1. or his auditor or agent in the manner prescribed in subsection 1.
  1. 3. The books, records and payroll of an employer who is insured by a
  1. private carrier must be open to inspection by that private carrier or its
  1. auditor or agent in the manner prescribed in subsection 1.

Sec. 3. NRS 616B.026 is hereby amended to read as follows:

  1. 616B.026 1. An insurer, other than a self-insured employer or an
  1. association of self-insured public or private employers, shall provide to each
  1. employer to whom the insurer provides industrial insurance , whether or not
  1. the employer is a member of a group that is provided with industrial
  1. insurance pursuant to NRS 616B.036, a certificate of insurance which
  1. indicates that the employer has obtained a policy of industrial insurance.
  1. 2. A certificate of insurance provided by an insurer pursuant to
  1. subsection 1 must include, without limitation:
  1. (a) The name of the insurer;
  1. (b) The name of the insured;
  1. (c) The number of the policy; and
  1. (d) The period for which the policy is effective.

Sec. 4. NRS 616B.036 is hereby amended to read as follows:

  1. 616B.036 1. The system and private carriers may provide industrial
  1. insurance for an organization or association of employers as a group if:
  1. (a) The members of the [group or] organization or association are
  1. engaged in a common trade or business; and
  1. (b) The formation and operation of a program of industrial insurance for
  1. the organization or association will substantially assist in the handling of
  1. claims and the prevention of accidents for the employers as a group.

2. Notwithstanding the provisions of subsection 1, the system and

private carriers may provide industrial insurance for an organization or

association of employers as a group whose members are not engaged in a

common trade or business if:

(a) The organization or association of employers is formed and

maintained for purposes other than obtaining industrial insurance; and

(b) The contract or other agreement pursuant to which the system or

the private carrier will provide industrial insurance for the organization

or association provides that:

(1) A separate policy will be issued to each member of the

organization or association; and

  1. (2) Other than the payment of premiums by the organization or
  1. association, the organization or association and each of its members are
  1. not liable for the cost of the administration of claims or the
  1. compensation payable pursuant to the provisions of chapters 616A to
  1. 616D, inclusive, or chapter 617 of NRS.
  1. 3. The commissioner must approve each [group or] organization or
  1. association before a policy of industrial insurance may be issued to it [.
  1. 3.] as a group pursuant to subsection 1 or 2.
  1. 4. The commissioner shall adopt regulations for the qualification of
  1. [groups for industrial insurance.] organizations or associations of
  1. employers described in subsections 1 and 2.

Sec. 5. NRS 616B.460 is hereby amended to read as follows:

  1. 616B.460 1. An employer may elect to purchase industrial insurance
  1. from a private carrier for his employees pursuant to chapters 616A to 617,
  1. inclusive, of NRS.
  1. 2. An employer may elect to purchase insurance from an insurer other
  1. than his present insurer if the employer has:
  1. (a) Given at least 10 days’ notice to the administrator of the change of
  1. insurer; and
  1. (b) Furnished evidence satisfactory to the administrator that the payment
  1. of compensation has otherwise been secured.
  1. 3. Each private carrier and the system shall notify the administrator if
  1. an employer has changed his insurer or has allowed his insurance to lapse,
  1. within [24 hours or by the end of the next working day] 15 days after the
  1. insurer has notice of the change or lapse.

Sec. 6. NRS 616B.670 is hereby amended to read as follows:

  1. 616B.670 As used in NRS 616B.670 to 616B.697, inclusive, unless
  1. the context otherwise requires:
  1. 1. "Applicant" means a person seeking a certificate of [insurance]
  1. registration pursuant to NRS 616B.670 to 616B.697, inclusive, to operate
  1. an employee leasing company.
  1. 2. "Client company" means a company which leases employees, for a
  1. fee, from an employee leasing company pursuant to a written or oral
  1. agreement.
  1. 3. "Employee leasing company" means a company which, pursuant to a
  1. written or oral agreement:
  1. (a) Places any of the regular, full-time employees of a client company on
  1. its payroll and, for a fee, leases them to the client company on a regular
  1. basis without any limitation on the duration of their employment; or
  2. (b) Leases to a client company:
  1. (1) Five or more part-time or full-time employees; or
  1. (2) Ten percent or more of the total number of employees within a
  1. classification of risk established by the [system.] commissioner.

Sec. 7. NRS 616B.673 is hereby amended to read as follows:

  1. 616B.673 1. A person shall not operate an employee leasing
  1. company in this state unless he has complied with the provisions of NRS
  1. 616B.670 to 616B.697, inclusive. The [manager] administrator shall issue
  1. a certificate of [insurance] registration to each applicant who complies
  1. with the provisions of NRS 616B.670 to 616B.697, inclusive.
  1. 2. Any person who violates the provisions of subsection 1 is guilty of a
  1. misdemeanor.
  1. 3. Each certificate of [insurance] registration issued by the [manager]
  1. administrator pursuant to NRS 616B.670 to 616B.697, inclusive, expires 1
  1. year after it is issued unless renewed before that date.

Sec. 8. NRS 616B.676 is hereby amended to read as follows:

  1. 616B.676 An applicant for the issuance or renewal of a certificate of
  1. [insurance] registration must submit to the [manager] administrator a
  1. written application upon a form provided by the [manager.] administrator.

Sec. 9. NRS 616B.679 is hereby amended to read as follows:

  1. 616B.679 1. Each application must include:
  1. (a) The applicant’s name and title of his position with the employee
  1. leasing company.
  1. (b) The applicant’s age, place of birth and social security number.
  1. (c) The applicant’s address.
  1. (d) The business address of the employee leasing company.
  1. (e) The business address of the resident agent of the employee leasing
  1. company, if the applicant is not the resident agent.
  1. (f) If the applicant is a:
  1. (1) Partnership, the name of the partnership and the name, address,
  1. age, social security number and title of each partner.
  1. (2) Corporation, the name of the corporation and the name, address,
  1. age, social security number and title of each officer of the corporation.
  1. (g) Proof of:
  1. (1) The payment of any taxes required by chapter 364A of NRS.
  1. (2) The payment of any premiums for industrial insurance required by
  1. chapters 616A to 617, inclusive, of NRS.
  1. (3) The payment of contributions or payments in lieu of contributions
  1. required by chapter 612 of NRS.
  1. (4) Insurance coverage for any benefit plan from an insurer
  1. authorized pursuant to Title 57 of NRS that is offered by the employee
  1. leasing company to its employees.
  1. [(5) Membership in the National Staff Leasing Association, or its
  1. successor organization.]
  1. (h) Any other information the [manager] administrator requires
  1. .
  2. 2. Each application must be notarized and signed under penalty of
  1. perjury:
  1. (a) If the applicant is a sole proprietorship, by the sole proprietor.
  1. (b) If the applicant is a partnership, by each partner.
  1. (c) If the applicant is a corporation, by each officer of the corporation.
  1. 3. An applicant shall submit to the [manager] administrator any
  1. change in the information required by this section within 30 days after the
  1. change occurs. The [manager] administrator may revoke the certificate of
  1. [insurance] registration of an employee leasing company which fails to
  1. comply with the provisions of [this subsection. If the manager revokes the
  1. certificate of insurance and cancels the] NRS 616B.670 to 616B.697,
  1. inclusive.
  1. 4. If an insurer cancels an employee leasing company’s policy, the
  1. [manager] insurer shall immediately notify the administrator [, who shall
  1. proceed in accordance with the provisions of NRS 616D.110.] in writing.
  1. The notice must comply with the provisions of NRS 687B.310 to
  1. 687B.355, inclusive, and must be served personally on or sent by first-
  1. class mail or electronic transmission to the administrator.

Sec. 10. NRS 616B.694 is hereby amended to read as follows:

  1. 616B.694 The [manager, in cooperation with the administrator of the
  1. employment security division of the department of employment, training
  1. and rehabilitation, shall, and the commissioner of insurance may,]
  1. administrator may adopt regulations to carry out the provisions of NRS
  1. 616B.670 to 616B.697, inclusive.

Sec. 11. NRS 616B.697 is hereby amended to read as follows:

616B.697 An action for damages caused by the failure of an employee

leasing company to comply with the provisions of NRS 616B.670 to

616B.697, inclusive, may be brought against any person who is required to

sign the application for a certificate of [insurance] registration for the

employee leasing company.

Sec. 12. NRS 616C.235 is hereby amended to read as follows:

  1. 616C.235 1. Except as otherwise provided in subsection 2:
  1. (a) When the insurer determines that a claim should be closed before all
  1. benefits to which the claimant may be entitled have been paid, the insurer
  1. shall send a written notice of its intention to close the claim to the claimant
  1. by first-class mail addressed to the last known address of the claimant. The
  1. notice must include a statement that if the claimant does not agree with the
  1. determination, he has a right to request a resolution of the dispute pursuant
  1. to NRS 616C.305 and 616C.315 to 616C.385, inclusive. A suitable form for
  1. requesting a resolution of the dispute must be enclosed with the notice. The
  1. closure of a claim pursuant to this subsection is not effective unless notice
  1. is given as required by this subsection.
  1. (b) If the insurer does not receive a request for the resolution of the
  1. dispute, it may close the claim.
  2. (c) Notwithstanding the provisions of NRS 233B.125, if a hearing is
  1. conducted to resolve the dispute, the decision of the hearing officer may be
  1. served by first-class mail.
  1. 2. If , during the first 12 months after a claim is opened, the medical
  1. benefits required to be paid for a claim are less than $500, the claim closes
  1. automatically . [if the claimant does not receive medical treatment for the
  1. injury for at least 12 months.] The claimant may not appeal the closing of
  1. such a claim. The insurer shall send to each claimant who receives less
  1. than $500 in medical benefits within 6 months after the claim is opened a
  1. written notice that explains the circumstances under which a claim may
  1. be closed automatically pursuant to this subsection. The written notice
  1. does not create any right to appeal the contents of that notice. The written
  1. notice must be:
  1. (a) Sent by first-class mail addressed to the last known address of the
  1. claimant; and

(b) A document that is separate from any other document or form that

is used by the insurer.

  1. The closure of a claim pursuant to this subsection is not effective unless
  1. notice is given as required by this subsection.

Sec. 13. NRS 616D.250 is hereby amended to read as follows:

  1. 616D.250 1. Any employer insured by the system who refuses to
  1. submit his books, records and payroll for inspection, as provided by NRS
  1. 616A.485, to a representative of the system or the administrator, or to an
  1. auditor from the department of taxation [,] presenting written authority for
  1. the inspection, is subject to a penalty of $1,000 for each offense, to be
  1. collected by a civil action in the name of the system or the administrator.
  1. 2. A self-insured employer, a member of an association of self-insured
  1. public or private employers or an employer insured by a private carrier who
  1. refuses to submit his books, records and payroll to the administrator or the
  1. private carrier for inspection as provided by NRS 616A.485 [,] is subject to
  1. a penalty of $1,000 for each offense, to be collected by a civil action in the
  1. name of the administrator [.] or the private carrier, as applicable.
  1. 3. The person who gives such refusal is guilty of a misdemeanor.

Sec. 14. 1. This section and sections 6 to 12, inclusive, of this act

become effective on July 1, 1999.

2. Sections 1 to 5, inclusive, and 13 of this act become effective at

12:01 a.m. on July 1, 1999.

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