Senate Bill No. 75–Committee on Commerce and Labor

February 2, 1999

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Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes regarding insurance. (BDR 57-336)

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 insurance; providing immunity from criminal penalties and civil liability under certain circumstances to persons who provide information concerning acts

of insurance fraud; limiting the use of that information by insurers and the employees and representatives of insurers; authorizing insurers to increase or decrease rates without the approval of the commissioner of insurance under

certain circumstances; 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 686A of NRS is hereby amended by adding thereto

1-2 a new section to read as follows:

1-3 1. A person who, without malice, provides information concerning

1-4 an act or suspected act of insurance fraud prohibited by NRS 686A.291 is

1-5 not subject to a criminal penalty or liable in a civil action if the

1-6 information is provided to:

1-7 (a) The commissioner, or his employees, agents or representatives;

1-8 (b) A person from a federal, state or local law enforcement agency or

1-9 other agency that regulates insurance, or an employee, agent or

1-10 representative of such a person;

1-11 (c) An organization that is involved in the prevention and detection of

1-12 acts of insurance fraud, or the employees, agents or representatives of

1-13 such an organization;

1-14 (d) The National Association of Insurance Commissioners, or its

1-15 employees, agents or representatives; or

1-16 (e) An insurer, or an employee, agent or representative of an insurer.

2-1 2. In a civil action brought against a person for providing

2-2 information concerning an act or a suspected act of insurance fraud, the

2-3 plaintiff must plead specifically that the person against whom the civil

action is filed is not immune from civil liability pursuant to this section

2-4 because the person who provided the information acted with actual

malice.

2-5 3. The provisions of this section do not abrogate or modify any

2-6 common law or statutory privilege or immunity that otherwise applies to

a person who provides information concerning an act or a suspected act

2-7 of insurance fraud.

4. An insurer, or an employee, agent or representative of an insurer,

2-8 shall not use any information disclosed to him pursuant to this section

2-9 for any purpose other than to investigate a suspicious or fraudulent

claim for benefits under a policy of insurance.

2-10 Sec. 2. NRS 686A.281 is hereby amended to read as follows:

686A.281 As used in NRS 686A.281 to 686A.295, inclusive, and

2-11 section 1 of this act, unless the context otherwise requires, the term

2-12 "investigative or law enforcement agency" includes:

1. The state fire marshal;

2-13 2. The district attorney of the county where any fraudulent activity has

occurred or a fraudulent claim has been made;

2-14 3. The chief or other officer of the fire department where a fire

2-15 occurred; and

4. Any other agency in this state who has the authority to investigate

2-16 the fraudulent claims or activities.

Sec. 3. NRS 686A.283 is hereby amended to read as follows:

2-17 686A.283 1. Any person, insurer or [authorized] employee, agent or

2-18 representative of an insurer, who believes, or has reason to believe, that a

fraudulent claim for benefits under a policy of insurance has been made, or

2-19 is about to be made, shall file a report [any information] concerning that

claim [to] with the commissioner . [on a] The report must be made in

2-20 writing or in any other form prescribed by the commissioner.

2-21 2. If the report is filed by an insurer or an employee, agent or

representative of an insurer, the report must include, without limitation:

2-22 (a) The names of the insurer and the insured.

(b) The number of the policy involved and the number of the claim.

2-23 (c) The date of loss, if known.

2-24 (d) The name, address and telephone number of the employee, agent

or representative of the insurer who is responsible for investigative the

2-25 claim.

(e) The name, date of birth and social security number, if known, of each person who is being 2-26 investigated by the insurer concerning the

2-27 claim.

2-28 (f) A brief description of the facts that have caused the insurer or the

employee, agent or representative of the insurer who files the report to

2-29 believe that the claim is fraudulent.

2-30 3. If the report is filed by a person other than an insurer or an

employee, agent or representative of an insurer, the report must include,

2-31 without limitation:

(a) A brief description of the facts that have caused the person who

2-32 files the report to believe that the claim is fraudulent.

2-33 (b) Any information required pursuant to paragraphs (a) to (e),

inclusive, of subsection 2, if known by the person who files the report.

2-34 4. The commissioner shall:

(a) Review each report of a fraudulent claim; and

2-35 (b) Determine whether an investigation should be made of the facts in

2-36 the report.

[3.] 5. During his investigation, the commissioner shall determine

2-37 whether there is probable cause to believe that there was deceit, fraud or an

intentional misrepresentation of a material fact in the claim.

2-38 [4.] 6. If the commissioner determines that the provisions of NRS

2-39 686A.010 to 686A.310, inclusive, have been violated he shall report his

findings to the district attorney of the county where the violation occurred.

2-40 Sec. 4. NRS 686B.110 is hereby amended to read as follows:

686B.110 1. [The] Except as otherwise provided in subsection 2,

2-41 the commissioner shall consider each proposed increase or decrease in the

2-42 rate of any kind or line of insurance or subdivision thereof filed with him

pursuant to NRS 686B.070. If the commissioner finds that a proposed

2-43 increase will result in a rate which is not in compliance with NRS

686B.050, he shall disapprove the proposal. The commissioner shall

2-44 approve or disapprove each proposal no later than 60 days after it is

2-45 determined by him to be complete pursuant to subsection [4.] 5. If the

commissioner fails to approve or disapprove the proposal within that

2-46 period, the proposal shall be deemed approved.

2. The commissioner shall not consider for approval or disapproval a

2-47 proposed increase or decrease in the rate of property or casualty

2-48 insurance or a line or subdivision thereof filed with him pursuant to NRS

686B.070 if the proposed increase or decrease does not change:

2-49 (a) The average premium for the insureds in this state for the line of

insurance within the preceding 12 months by more than 5 percent; and

2-50 (b) The premium for an insured for property or casualty insurance

2-51 within the preceding 12 months by more than 20 percent.

3. Whenever an insurer has no legally effective rates as a result of the

2-52 commissioner’s disapproval of rates or other act, the commissioner shall on request specify interim rates for the insurer that are high enough to protect

2-53 the interests of all parties and may order that a specified portion of the

premiums be placed in an escrow account approved by him. When new

3-1 rates become legally effective, the commissioner shall order the escrowed

funds or any overcharge in the interim rates to be distributed appropriately,

3-2 except that refunds to policyholders that are de minimis must not be

3-3 required.

[3.] 4. If the commissioner disapproves a proposed rate and an insurer

3-4 requests a hearing to determine the validity of his action, the insurer has the

burden of showing compliance with the applicable standards for rates

3-5 established in NRS 686B.010 to 686B.1799, inclusive. Any such hearing

3-6 must be held:

(a) Within 30 days after the request for a hearing has been submitted to

3-7 the commissioner; or

(b) Within a period agreed upon by the insurer and the commissioner.

3-8 If the hearing is not held within the period specified in paragraph (a) or (b),

3-9 or if the commissioner fails to issue an order concerning the proposed rate

for which the hearing is held within 45 days after the hearing, the proposed

3-10 rate shall be deemed approved.

[4.] 5. The commissioner shall by regulation specify the documents or

3-11 any other information which must be included in a proposal to increase or

3-12 decrease a rate submitted to him pursuant to [subsection 1.] NRS

686B.070. Each such proposal shall be deemed complete upon its filing

3-13 with the commissioner, unless the commissioner, within 15 business days

after the proposal is filed with him, determines that the proposal is

3-14 incomplete because the proposal does not comply with the regulations

3-15 adopted by him pursuant to this subsection.

Sec. 5. NRS 679B.157 is hereby repealed.

 

3-16 TEXT OF REPEALED SECTION

 

679B.157 Liability for disclosure of information on fraudulent

3-17 claim or suspicious fire. An insurer, employee or representative of an

insurer, official of an investigative or law enforcement agency, employee of

3-18 the division or the commissioner is not subject to a criminal penalty or

subject to civil liability for libel, slander or any similar cause of action in

3-19 tort if he, without malice, discloses information on a fraudulent claim or

3-20 suspicious fire.

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