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

1-3 association of self-insured public or private employers, the employer must:

1-4 (a) Submit an application for membership to the board of trustees or

1-5 third-party administrator of the association; and

1-6 (b) Enter into an indemnity agreement as required by NRS 616B.353.

1-7 2. The membership of the applicant becomes effective when each

1-8 member of the association approves the application or on a later date

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

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

2-2 the 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

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

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

2-9 , 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

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

2-34 certificate withdrawn before the date on which the association filed the

2-35 application.

2-36 6. An association of self-insured private employers may apply to the

2-37 commissioner for authority to determine the documentation

2-38 demonstrating solvency that an employer must provide to become a

2-39 member of the association. The commissioner shall approve the

2-40 application if the association:

2-41 (a) Has been certified to act as an association for at least the 3

2-42 consecutive years immediately preceding the date on which the

2-43 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) Within 30 days after the addition of an employer to the

3-20 membership of the association, notify the commissioner of the addition

3-21 and:

3-22 (1) If the association has not received authority from the

3-23 commissioner pursuant to subsection 5 or 6, as applicable, provide to the

3-24 commissioner all information and assurances for the new member that

3-25 were required from each of the original members of the association upon

3-26 its organization; or

3-27 (2) If the association has received authority from the commissioner

3-28 pursuant to subsection 5 or 6, as applicable, provide to the commissioner

3-29 evidence that is satisfactory to the commissioner that the new member is

3-30 a member or associate member of the bona fide trade association as

3-31 required pursuant to paragraph (a) of subsection 2 of NRS 616B.350, a

3-32 copy of the indemnity agreement that jointly and severally binds the new

3-33 member, the other members of the association and the association that is

3-34 required to be executed pursuant to paragraph (a) of subsection 1 of

3-35 NRS 616B.353 and any other information the commissioner may

3-36 reasonably require to determine whether the amount of security

3-37 deposited with the commissioner pursuant to paragraph (d) or (e) of

3-38 subsection 1 of NRS 616B.353 is sufficient, but such information must

3-39 not exceed the information required to be provided to the commissioner

3-40 pursuant to subparagraph (1);

3-41 (b) Notify the commissioner and the administrator of the termination or

3-42 cancellation of the membership of any member of the association within 10

3-43 days after the termination or cancellation; and

4-1 [(b)] (c) At the expense of the member whose membership is

4-2 terminated or canceled, maintain coverage for that member for 30 days

4-3 after notice is given pursuant to paragraph [(a),] (b), unless the association

4-4 first receives notice from the administrator that the member has:

4-5 (1) Provided and secured compensation according to the terms,

4-6 conditions and provisions of chapters 616A to 616D, inclusive, of NRS for

4-7 any injury sustained by an employee arising out of and in the course of his

4-8 employment;

4-9 (2) Been certified as a self-insured employer pursuant to NRS

4-10 616B.312; or

4-11 (3) Become a member of another association of self-insured public or

4-12 private employers.

4-13 [7.] 11. If a member of an association changes his name or form of

4-14 organization, the member remains liable for any obligations incurred or

4-15 any responsibilities imposed pursuant to chapters 616A to 617, inclusive,

4-16 of NRS under his former name or form of organization.

4-17 [8.] 12. An association is liable for the payment of any compensation

4-18 required to be paid by a member of the association under chapters 616A to

4-19 616D, inclusive, or chapter 617 of NRS during his period of membership.

4-20 The insolvency or bankruptcy of a member does not relieve the association

4-21 of liability for the payment of such compensation.

4-22 Sec. 2. NRS 616B.386 is hereby amended to read as follows:

4-23 616B.386 1. If an employer wishes to become a member of an

4-43 of the association must meet the requirement set forth in paragraph (a) or

5-1 (b) of subsection 3 unless the commissioner adjusts the requirement for

5-2 membership in the association after conducting an annual review of the

5-3 actuarial solvency of the association pursuant to subsection 1 of NRS

5-4 616B.353.

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

5-6 the commissioner for authority to determine the amount of tangible net

5-7 worth and manual premium that an employer must have to become a

5-8 member of the association. The commissioner shall approve the

5-9 application if the association:

5-10 (a) Has been certified to act as an association for at least the 3

5-11 consecutive years immediately preceding the date on which the

5-12 association filed the application with the commissioner;

5-13 (b) Has a combined tangible net worth of all members in the

5-14 association of at least $5,000,000;

5-15 (c) Has at least 15 members; and

5-16 (d) Has not been required to meet informally with the commissioner

5-17 pursuant to subsection 1 of NRS 616B.431 during the 18-month period

5-18 immediately preceding the date on which the association filed the

5-19 application with the commissioner or, if the association has been required

5-20 to attend such a meeting during that period, has not had its certificate

5-21 withdrawn before the date on which the association filed the application.

5-22 6. An association of self-insured private employers may apply to the

5-23 commissioner for authority to determine the documentation

5-24 demonstrating solvency that an employer must provide to become a

5-25 member of the association. The commissioner shall approve the

5-26 application if the association:

5-27 (a) Has been certified to act as an association for at least the 3

5-28 consecutive years immediately preceding the date on which the

5-29 association filed the application with the commissioner;

5-30 (b) Has a combined tangible net worth of all members in the

5-31 association of at least $5,000,000; and

5-32 (c) Has at least 15 members.

5-33 7. The commissioner may withdraw his approval of an application

5-34 submitted pursuant to subsection 5 or 6 if he determines the association

5-35 has ceased to comply with any of the requirements set forth in subsection

5-36 5 or 6, as applicable.

5-37 8. Except as otherwise provided in NRS 616B.389, a member of an

5-38 association may terminate his membership at any time. To terminate his

5-39 membership, a member must submit to the association’s administrator a

5-40 notice of intent to withdraw from the association at least 120 days before

5-41 the effective date of withdrawal. The association’s administrator shall,

5-42 within 10 days after receipt of the notice, notify the commissioner of the

5-43 employer’s intent to withdraw from the association.

6-1 [5.] 9. The members of an association may cancel the membership of

6-2 any member of the association in accordance with the bylaws of the

6-3 association.

6-4 [6.] 10. The association shall:

6-5 (a) Within 30 days after the addition of an employer to the

6-6 membership of the association, notify the commissioner of the addition

6-7 and:

6-8 (1) If the association has not received authority from the

6-9 commissioner pursuant to subsection 5 or 6, as applicable, provide to the

6-10 commissioner all information and assurances for the new member that

6-11 were required from each of the original members of the association upon

6-12 its organization; or

6-13 (2) If the association has received authority from the commissioner

6-14 pursuant to subsection 5 or 6, as applicable, provide to the commissioner

6-15 evidence that is satisfactory to the commissioner that the new member is

6-16 a member or associate member of the bona fide trade association as

6-17 required pursuant to paragraph (a) of subsection 2 of NRS 616B.350, a

6-18 copy of the indemnity agreement that jointly and severally binds the new

6-19 member, the other members of the association and the association that is

6-20 required to be executed pursuant to paragraph (a) of subsection 1 of

6-21 NRS 616B.353 and any other information the commissioner may

6-22 reasonably require to determine whether the amount of security

6-23 deposited with the commissioner pursuant to paragraph (d) or (e) of

6-24 subsection 1 of NRS 616B.353 is sufficient, but such information must

6-25 not exceed the information required to be provided to the commissioner

6-26 pursuant to subparagraph (1);

6-27 (b) Notify the commissioner and the administrator of the termination or

6-28 cancellation of the membership of any member of the association within 10

6-29 days after the termination or cancellation; and

6-30 [(b)] (c) At the expense of the member whose membership is terminated

6-31 or canceled, maintain coverage for that member for 30 days after notice is

6-32 given pursuant to paragraph [(a),] (b), unless the association first receives

6-33 notice from the administrator that the member has:

6-34 (1) Become insured by the system;

6-35 (2) Been certified as a self-insured employer pursuant to NRS

6-36 616B.312;

6-37 (3) Become a member of another association of self-insured public or

6-38 private employers; or

6-39 (4) Become insured by a private carrier.

6-40 [7.] 11. If a member of an association changes his name or form of

6-41 organization, the member remains liable for any obligations incurred or any

6-42 responsibilities imposed pursuant to chapters 616A to 617, inclusive, of

6-43 NRS under his former name or form of organization.

7-1 [8.] 12. An association is liable for the payment of any compensation

7-2 required to be paid by a member of the association pursuant to chapters

7-3 616A to 616D, inclusive, or chapter 617 of NRS during his period of

7-4 membership. The insolvency or bankruptcy of a member does not relieve

7-5 the association of liability for the payment of the compensation.

7-6 Sec. 3. NRS 616B.389 is hereby amended to read as follows:

7-7 616B.389 1. Except as otherwise provided in subsection 2, if the

7-25 July 1, 1998, obtain industrial insurance from the system.

7-26 Sec. 4. NRS 616B.392 is hereby amended to read as follows:

7-27 616B.392 1. An association of self-insured public or private

7-34 for certification.

7-35 Sec. 5. 1. This section and sections 1, 3 and 4 of this act become

7-36 effective upon passage and approval.

7-37 2. Section 1 of this act expires by limitation on July 1, 1999.

7-38 3. Section 2 of this act becomes effective at 12:01 a.m. on July 1, 1999.