Senate Bill No. 38–Committee on Commerce and Labor

Prefiled January 27, 1999

(On Behalf of Legislative Committee on Workers’ Compensation)

____________

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes concerning industrial insurance. (BDR 53-379)

FISCAL NOTE: Effect on Local Government: Yes.

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; 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:

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

1-2 616A.465 1. Except as otherwise provided in this section, the

1-3 division shall:

1-4 (a) Regulate insurers pursuant to chapters 616A to 617, inclusive, of

1-5 NRS; [and]

1-6 (b) Investigate insurers regarding compliance with statutes and the

1-7 division’s regulations [.] ;

1-8 (c) Determine whether an employee leasing company is entitled to a

1-9 certificate of registration pursuant to NRS 616B.673; and

1-10 (d) Regulate employee leasing companies pursuant to the provisions

1-11 of NRS 616B.670 to 616B.697, inclusive.

2-1 2. The commissioner is responsible for reviewing rates, investigating

2-2 the solvency of insurers, authorizing private carriers pursuant to chapter

2-3 680A of NRS and certifying:

2-4 (a) Self-insured employers pursuant to NRS 616B.300 to 616B.330,

2-5 inclusive, and 616B.336;

2-6 (b) Associations of self-insured public or private employers pursuant to

2-7 NRS 616B.350 to 616B.446, inclusive; and

2-8 (c) Third-party administrators pursuant to chapter 683A of NRS.

2-9 3. The department of administration is responsible for contested claims

2-10 relating to industrial insurance pursuant to NRS 616C.310 to 616C.385,

2-11 inclusive. The administrator is responsible for administrative appeals

2-12 pursuant to NRS 616B.215.

2-13 4. The Nevada attorney for injured workers is responsible for legal

2-14 representation of claimants pursuant to NRS 616A.435 to 616A.460,

2-15 inclusive, and 616D.120.

2-16 5. The division is responsible for the investigation of complaints. If a

2-17 complaint is filed with the division, the administrator shall cause to be

2-18 conducted an investigation which includes a review of relevant records and

2-19 interviews of affected persons. If the administrator determines that a

2-20 violation may have occurred, the administrator shall proceed in accordance

2-21 with the provisions of NRS 616D.120 and 616D.130.

2-22 6. As used in this section, "employee leasing company" has the

2-23 meaning ascribed to it in NRS 616B.670.

2-24 Sec. 2. NRS 616A.485 is hereby amended to read as follows:

2-25 616A.485 1. The books, records and payrolls of an employer insured

2-26 by the system must be open to inspection by the administrator, the system or

2-27 its auditor or agent or by auditors of the department of taxation to

2-28 determine:

2-29 (a) The accuracy of the payroll;

2-30 (b) The number of persons employed; and

2-31 (c) Any other information necessary for the administration of chapters

2-32 616A to 617, inclusive, of NRS.

2-33 2. The books, records and payroll of an employer who is self-insured, a

2-34 member of an association of self-insured public or private employers or

2-35 insured by a private carrier must be open to inspection by the administrator

2-36 or his auditor or agent in the manner prescribed in subsection 1.

2-37 3. The books, records and payroll of an employer who is insured by a

2-38 private carrier must be open to inspection by that private carrier or its

2-39 auditor or agent in the manner prescribed in subsection 1.

2-40 Sec. 3. NRS 616B.026 is hereby amended to read as follows:

2-41 616B.026 1. An insurer, other than a self-insured employer or an

2-42 association of self-insured public or private employers, shall provide to each

2-43 employer to whom the insurer provides industrial insurance , whether or not

3-1 the employer is a member of a group that is provided with industrial

3-2 insurance pursuant to NRS 616B.036, a certificate of insurance which

3-3 indicates that the employer has obtained a policy of industrial insurance.

3-4 2. A certificate of insurance provided by an insurer pursuant to

3-5 subsection 1 must include, without limitation:

3-6 (a) The name of the insurer;

3-7 (b) The name of the insured;

3-8 (c) The number of the policy; and

3-9 (d) The period for which the policy is effective.

3-10 Sec. 4. NRS 616B.036 is hereby amended to read as follows:

3-11 616B.036 1. The system and private carriers may provide industrial

3-12 insurance for an organization or association of employers as a group if:

3-13 (a) The members of the [group or] organization or association are

3-14 engaged in a common trade or business; and

3-15 (b) The formation and operation of a program of industrial insurance for

3-16 the organization or association will substantially assist in the handling of

3-17 claims and the prevention of accidents for the employers as a group.

3-18 2. Notwithstanding the provisions of subsection 1, the system and

3-19 private carriers may provide industrial insurance for an organization or

3-20 association of employers as a group whose members are not engaged in a

3-21 common trade or business if:

3-22 (a) The organization or association of employers is formed and

3-23 maintained for purposes other than obtaining industrial insurance; and

3-24 (b) The contract or other agreement pursuant to which the system or

3-25 the private carrier will provide industrial insurance for the organization

3-26 or association provides that:

3-27 (1) A separate policy will be issued to each member of the

3-28 organization or association; and

3-29 (2) Other than the payment of premiums by the organization or

3-30 association, the organization or association and each of its members are

3-31 not liable for the cost of the administration of claims or the

3-32 compensation payable pursuant to the provisions of chapters 616A to

3-33 616D, inclusive, or chapter 617 of NRS.

3-34 3. The commissioner must approve each [group or] organization or

3-35 association before a policy of industrial insurance may be issued to it [.

3-36 3.] as a group pursuant to subsection 1 or 2.

3-37 4. The commissioner shall adopt regulations for the qualification of

3-38 [groups for industrial insurance.] organizations or associations of

3-39 employers described in subsections 1 and 2.

3-40 Sec. 5. NRS 616B.460 is hereby amended to read as follows:

3-41 616B.460 1. An employer may elect to purchase industrial insurance

3-42 from a private carrier for his employees pursuant to chapters 616A to 617,

3-43 inclusive, of NRS.

4-1 2. An employer may elect to purchase insurance from an insurer other

4-2 than his present insurer if the employer has:

4-3 (a) Given at least 10 days’ notice to the administrator of the change of

4-4 insurer; and

4-5 (b) Furnished evidence satisfactory to the administrator that the payment

4-6 of compensation has otherwise been secured.

4-7 3. Each private carrier and the system shall notify the administrator if

4-8 an employer has changed his insurer or has allowed his insurance to lapse,

4-9 within [24 hours or by the end of the next working day] 15 days after the

4-10 insurer has notice of the change or lapse.

4-11 Sec. 6. NRS 616B.670 is hereby amended to read as follows:

4-12 616B.670 As used in NRS 616B.670 to 616B.697, inclusive, unless

4-13 the context otherwise requires:

4-14 1. "Applicant" means a person seeking a certificate of [insurance]

4-15 registration pursuant to NRS 616B.670 to 616B.697, inclusive, to operate

4-16 an employee leasing company.

4-17 2. "Client company" means a company which leases employees, for a

4-18 fee, from an employee leasing company pursuant to a written or oral

4-19 agreement.

4-20 3. "Employee leasing company" means a company which, pursuant to a

4-21 written or oral agreement:

4-22 (a) Places any of the regular, full-time employees of a client company on

4-23 its payroll and, for a fee, leases them to the client company on a regular

4-24 basis without any limitation on the duration of their employment; or

4-25 (b) Leases to a client company:

4-26 (1) Five or more part-time or full-time employees; or

4-27 (2) Ten percent or more of the total number of employees within a

4-28 classification of risk established by the [system.] commissioner.

4-29 Sec. 7. NRS 616B.673 is hereby amended to read as follows:

4-30 616B.673 1. A person shall not operate an employee leasing

4-31 company in this state unless he has complied with the provisions of NRS

4-32 616B.670 to 616B.697, inclusive. The [manager] administrator shall issue

4-33 a certificate of [insurance] registration to each applicant who complies

4-34 with the provisions of NRS 616B.670 to 616B.697, inclusive.

4-35 2. Any person who violates the provisions of subsection 1 is guilty of a

4-36 misdemeanor.

4-37 3. Each certificate of [insurance] registration issued by the [manager]

4-38 administrator pursuant to NRS 616B.670 to 616B.697, inclusive, expires 1

4-39 year after it is issued unless renewed before that date.

4-40 Sec. 8. NRS 616B.676 is hereby amended to read as follows:

4-41 616B.676 An applicant for the issuance or renewal of a certificate of

4-42 [insurance] registration must submit to the [manager] administrator a

4-43 written application upon a form provided by the [manager.] administrator.

5-1 Sec. 9. NRS 616B.679 is hereby amended to read as follows:

5-2 616B.679 1. Each application must include:

5-3 (a) The applicant’s name and title of his position with the employee

5-4 leasing company.

5-5 (b) The applicant’s age, place of birth and social security number.

5-6 (c) The applicant’s address.

5-7 (d) The business address of the employee leasing company.

5-8 (e) The business address of the resident agent of the employee leasing

5-9 company, if the applicant is not the resident agent.

5-10 (f) If the applicant is a:

5-11 (1) Partnership, the name of the partnership and the name, address,

5-12 age, social security number and title of each partner.

5-13 (2) Corporation, the name of the corporation and the name, address,

5-14 age, social security number and title of each officer of the corporation.

5-15 (g) Proof of:

5-16 (1) The payment of any taxes required by chapter 364A of NRS.

5-17 (2) The payment of any premiums for industrial insurance required by

5-18 chapters 616A to 617, inclusive, of NRS.

5-19 (3) The payment of contributions or payments in lieu of contributions

5-20 required by chapter 612 of NRS.

5-21 (4) Insurance coverage for any benefit plan from an insurer

5-22 authorized pursuant to Title 57 of NRS that is offered by the employee

5-23 leasing company to its employees.

5-24 [(5) Membership in the National Staff Leasing Association, or its

5-25 successor organization.]

5-26 (h) Any other information the [manager] administrator requires.

5-27 2. Each application must be notarized and signed under penalty of

5-28 perjury:

5-29 (a) If the applicant is a sole proprietorship, by the sole proprietor.

5-30 (b) If the applicant is a partnership, by each partner.

5-31 (c) If the applicant is a corporation, by each officer of the corporation.

5-32 3. An applicant shall submit to the [manager] administrator any

5-33 change in the information required by this section within 30 days after the

5-34 change occurs. The [manager] administrator may revoke the certificate of

5-35 [insurance] registration of an employee leasing company which fails to

5-36 comply with the provisions of [this subsection. If the manager revokes the

5-37 certificate of insurance and cancels the] NRS 616B.670 to 616B.697,

5-38 inclusive.

5-39 4. If an insurer cancels an employee leasing company’s policy, the

5-40 [manager] insurer shall immediately notify the administrator [, who shall

5-41 proceed in accordance with the provisions of NRS 616D.110.] in writing.

5-42 The notice must comply with the provisions of NRS 687B.310 to

6-1 687B.355, inclusive, and must be served personally on or sent by first-

6-2 class mail or electronic transmission to the administrator.

6-3 Sec. 10. NRS 616B.694 is hereby amended to read as follows:

6-4 616B.694 The [manager, in cooperation with the administrator of the

6-5 employment security division of the department of employment, training

6-6 and rehabilitation, shall, and the commissioner of insurance may,]

6-7 administrator may adopt regulations to carry out the provisions of NRS

6-8 616B.670 to 616B.697, inclusive.

6-9 Sec. 11. NRS 616B.697 is hereby amended to read as follows:

6-10 616B.697 An action for damages caused by the failure of an employee

6-11 leasing company to comply with the provisions of NRS 616B.670 to

6-12 616B.697, inclusive, may be brought against any person who is required to

6-13 sign the application for a certificate of [insurance] registration for the

6-14 employee leasing company.

6-15 Sec. 12. NRS 616C.235 is hereby amended to read as follows:

6-16 616C.235 1. Except as otherwise provided in subsection 2:

6-17 (a) When the insurer determines that a claim should be closed before all

6-18 benefits to which the claimant may be entitled have been paid, the insurer

6-19 shall send a written notice of its intention to close the claim to the claimant

6-20 by first-class mail addressed to the last known address of the claimant. The

6-21 notice must include a statement that if the claimant does not agree with the

6-22 determination, he has a right to request a resolution of the dispute pursuant

6-23 to NRS 616C.305 and 616C.315 to 616C.385, inclusive. A suitable form for

6-24 requesting a resolution of the dispute must be enclosed with the notice. The

6-25 closure of a claim pursuant to this subsection is not effective unless notice

6-26 is given as required by this subsection.

6-27 (b) If the insurer does not receive a request for the resolution of the

6-28 dispute, it may close the claim.

6-29 (c) Notwithstanding the provisions of NRS 233B.125, if a hearing is

6-30 conducted to resolve the dispute, the decision of the hearing officer may be

6-31 served by first-class mail.

6-32 2. If the medical benefits required to be paid for a claim are less than

6-33 $500, the claim closes automatically if the claimant does not receive

6-34 additional medical treatment for the injury for at least 12 months [.] after

6-35 the claim is opened. The claimant may not appeal the closing of such a

6-36 claim. The insurer shall send to each claimant who receives less than

6-37 $500 in medical benefits within 6 months after the claim is opened a

6-38 written notice that explains the circumstances under which a claim may

6-39 be closed automatically pursuant to this subsection. The written notice

6-40 does not create any right to appeal the contents of that notice. The written

6-41 notice must be:

6-42 (a) Sent by first-class mail addressed to the last known address of the

6-43 claimant; and

7-1 (b) A document that is separate from any other document or form that

7-2 is used by the insurer.

7-3 The closure of a claim pursuant to this subsection is not effective unless

7-4 notice is given as required by this subsection.

7-5 Sec. 13. NRS 616D.250 is hereby amended to read as follows:

7-6 616D.250 1. Any employer insured by the system who refuses to

7-7 submit his books, records and payroll for inspection, as provided by NRS

7-8 616A.485, to a representative of the system or the administrator, or to an

7-9 auditor from the department of taxation [,] presenting written authority for

7-10 the inspection, is subject to a penalty of $1,000 for each offense, to be

7-11 collected by a civil action in the name of the system or the administrator.

7-12 2. A self-insured employer, a member of an association of self-insured

7-13 public or private employers or an employer insured by a private carrier who

7-14 refuses to submit his books, records and payroll to the administrator or the

7-15 private carrier for inspection as provided by NRS 616A.485 [,] is subject to

7-16 a penalty of $1,000 for each offense, to be collected by a civil action in the

7-17 name of the administrator [.] or the private carrier, as applicable.

7-18 3. The person who gives such refusal is guilty of a misdemeanor.

7-19 Sec. 14. 1. This section and sections 6 to 12, inclusive, of this act

7-20 become effective on July 1, 1999.

7-21 2. Sections 1 to 5, inclusive, and 13 of this act become effective at

7-22 12:01 a.m. on July 1, 1999.

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