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).

1-1 Section 1. NRS 616B.386 is hereby amended to read as follows:

1-2 616B.386 1. If an employer wishes to become a member of an

1-9 specified by the association. The application for membership and the action

2-1 taken on the application must be maintained as permanent records of the

2-2 board of trustees.

2-3 3. Each member who is a member of an association during the 12

2-4 months immediately following the formation of the association must:

2-5 (a) Have a tangible net worth of at least $500,000; or

2-6 (b) Have had a reported payroll for the previous 12 months which would

2-7 have resulted in a manual premium [calculated according to the regulations

2-8 adopted pursuant to NRS 616B.206] of at least $15,000 [.

2-9 Any] , calculated in accordance with a manual prepared pursuant to

2-10 subsection 4 of NRS 686B.1765.

2-11 4. An employer who seeks to become a member of the association

2-12 [subsequently] after the 12 months immediately following the formation

2-13 of the association must meet the requirement set forth in paragraph (a) or

2-14 (b) of subsection 3 unless the commissioner adjusts the requirement for

2-15 membership in the association after conducting an annual review of the

2-16 actuarial solvency of the association pursuant to subsection 1 of NRS

2-17 616B.353.

2-18 [4.] 5. An association of self-insured private employers may apply to

2-19 the commissioner for authority to determine the amount of tangible net

2-20 worth and manual premium that an employer must have to become a

2-21 member of the association. The commissioner shall approve the

2-22 application if the association:

2-23 (a) Has been certified to act as an association for at least the 3

2-24 consecutive years immediately preceding the date on which the

2-25 association filed the application with the commissioner;

2-26 (b) Has a combined tangible net worth of all members in the

2-27 association of at least $5,000,000;

2-28 (c) Has at least 15 members; and

2-29 (d) Has not been required to meet informally with the commissioner

2-30 pursuant to subsection 1 of NRS 616B.431 during the 18-month period

2-31 immediately preceding the date on which the association filed the

2-32 application with the commissioner or, if the association has been required

2-33 to attend such a meeting during that period, has not had its certificate

2-34 withdrawn before the date on which the association filed the application.

2-35 6. An association of self-insured private employers may apply to the

2-36 commissioner for authority to determine the documentation

2-37 demonstrating solvency that an employer must provide to become a

2-38 member of the association. The commissioner shall approve the

2-39 application if the association:

2-40 (a) Has been certified to act as an association for at least the 3

2-41 consecutive years immediately preceding the date on which the

2-42 association filed the application with the commissioner;

3-1 (b) Has a combined tangible net worth of all members in the

3-2 association of at least $5,000,000; and

3-3 (c) Has at least 15 members.

3-4 7. The commissioner may withdraw his approval of an application

3-5 submitted pursuant to subsection 5 or 6 if he determines the association

3-6 has ceased to comply with any of the requirements set forth in subsection

3-7 5 or 6, as applicable.

3-8 8. Except as otherwise provided in NRS 616B.389, a member of an

3-9 association may terminate his membership at any time. To terminate his

3-10 membership, a member must submit to the association’s administrator a

3-11 notice of intent to withdraw from the association at least 120 days before

3-12 the effective date of withdrawal. The association’s administrator shall,

3-13 within 10 days after receipt of the notice, notify the commissioner of the

3-14 employer’s intent to withdraw from the association.

3-15 [5.] 9. The members of an association may cancel the membership of

3-16 any member of the association in accordance with the bylaws of the

3-17 association.

3-18 [6.] 10. The association shall:

3-19 (a) Notify the commissioner and the administrator of the termination or

3-20 cancellation of the membership of any member of the association within 10

3-21 days after the termination or cancellation; and

3-22 (b) At the expense of the member whose membership is terminated or

3-23 canceled, maintain coverage for that member for 30 days after notice is

3-24 given pursuant to paragraph (a), unless the association first receives notice

3-25 from the administrator that the member has:

3-26 (1) Become insured by the system;

3-27 (2) Been certified as a self-insured employer pursuant to NRS

3-28 616B.312;

3-29 (3) Become a member of another association of self-insured public or

3-30 private employers; or

3-31 (4) Become insured by a private carrier.

3-32 [7.] 11. If a member of an association changes his name or form of

3-33 organization, the member remains liable for any obligations incurred or any

3-34 responsibilities imposed pursuant to chapters 616A to 617, inclusive, of

3-35 NRS under his former name or form of organization.

3-36 [8.] 12. An association is liable for the payment of any compensation

3-37 required to be paid by a member of the association pursuant to chapters

3-38 616A to 616D, inclusive, or chapter 617 of NRS during his period of

3-39 membership. The insolvency or bankruptcy of a member does not relieve

3-40 the association of liability for the payment of the compensation.

3-41 Sec. 2. NRS 616B.389 is hereby amended to read as follows:

3-42 616B.389 1. Except as otherwise provided in subsection 2, if the

3-43 membership of an employer who was a member of an association of self

4-1 insured public or private employers has been terminated or canceled and

4-2 the system subsequently insures that employer:

4-3 (a) The employer shall remain insured by the system for at least 2 years

4-4 before it may join an association of self-insured public or private

4-5 employers.

4-6 (b) The system shall determine the amount of premium that such an

4-7 employer must pay based on:

4-8 (1) The premium rate for the standard industrial classification of that

4-9 employer which the system may deviate from not more than 15 percent;

4-10 and

4-11 (2) An adjustment based on the experience of the employer for the 3

4-12 previous years,

4-13 in accordance with [the regulations adopted] rates approved by the

4-14 commissioner pursuant to NRS [616B.206.] 686B.177.

4-15 2. A member of an association who terminates his membership in the

4-16 association pursuant to subsection [4] 8 of NRS 616B.386 may not, before

4-17 July 1, 1998, obtain industrial insurance from the system.

4-18 Sec. 3. NRS 616B.392 is hereby amended to read as follows:

4-19 616B.392 1. An association of self-insured public or private

4-26 for certification.

4-27 Sec. 4. 1. This section and sections 2 and 3 of this act become

4-28 effective on July 1, 1999.

4-29 2. Section 1 of this act becomes effective at 12:01 a.m. on July 1, 1999.