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 686B.050 is hereby amended to read as follows:

1-2 686B.050 1. Rates must not be excessive, inadequate or unfairly

1-16 rates are excessive only if the commissioner determines that there is not a

2-1 reasonable degree of price competition at the consumer level with respect

2-2 to the class of business to which they apply [.] and that the rates are likely

2-3 to produce a long-run profit that is unreasonably high in relation to the

2-4 riskiness of the class of business, or if the expenses are unreasonably

2-5 high in relation to the services rendered. In determining whether a

2-6 reasonable degree of price competition exists, the commissioner shall

2-7 consider all relevant tests, including:

2-8 (a) The number of insurers actively engaged in the class of business and

2-9 their shares of the market;

2-10 (b) The existence of differentials in rates in that class of business;

2-11 (c) Whether long-run profitability for insurers generally of the class of

2-12 business is unreasonably high in relation to its riskiness;

2-13 (d) Consumers’ knowledge in regard to the market in question; and

2-14 (e) Whether price competition is a result of the market or is
2-15 artificial.

2-16 [If competition does not exist, rates are excessive if they are likely to

2-17 produce a long-run profit that is unreasonably high in relation to the

2-18 riskiness of the class of business, or if expenses are unreasonably high in

2-19 relation to the services rendered.

2-20 3.] 4. Rates are inadequate if they are clearly insufficient, together with

2-21 the income from investments attributable to them, to sustain projected

2-22 losses and expenses in the class of business to which they apply.

2-23 [4.] 5. One rate is unfairly discriminatory in relation to another in the

2-24 same class if it clearly fails to reflect equitably the differences in expected

2-25 losses and expenses. Rates are not unfairly discriminatory because different

2-26 premiums result for policyholders with similar exposure to loss but

2-27 different expense factors, or similar expense factors but different exposure

2-28 to loss, so long as the rates reflect the differences with reasonable accuracy.

2-29 Rates are not unfairly discriminatory if they are averaged broadly among

2-30 persons insured under a group, franchise or blanket policy.

2-31 Sec. 2. NRS 686B.070 is hereby amended to read as follows:

2-32 686B.070 1. Every authorized insurer and every rate service

2-40 made by it for use in this state.

3-1 2. Except as otherwise provided in this section and NRS 686B.110,

3-2 unless the commissioner has determined that the market is not

3-3 competitive, an insurer shall file the information required by subsection

3-4 1 on or before the date on which the changes are to become effective.

3-5 3. In a competitive market, if the commissioner determines that rates

3-6 of an insurer require closer supervision by the commissioner because of

3-7 the financial condition of the insurer or because the insurer has engaged

3-8 in rating practices which are unfairly discriminatory, the commissioner

3-9 may require the insurer to file supporting data pursuant to NRS

3-10 686B.100 or subject the rates to review pursuant to NRS 686B.110.

3-11 4. The commissioner shall review filings made pursuant to this

3-12 section as soon as practicable to:

3-13 (a) Ensure the sufficiency of the financial condition of the insurer;

3-14 and

3-15 (b) Determine if the insurer has engaged in rating practices which are

3-16 unfairly discriminatory.

3-17 5. Rates for title insurance, surety insurance and liability insurance

3-18 for medical malpractice must be approved before the insurer may use the

3-19 rates. If the commissioner does not approve or disapprove a filing

3-20 involving the rates for such insurance within 60 days after the date of the

3-21 filing, the rates shall be deemed to be approved.

3-22 Sec. 3. NRS 686B.100 is hereby amended to read as follows:

3-23 686B.100 1. [By rule, the commissioner may require the filing of

3-42 the filing shall be deemed to be made when the information is furnished.

4-1 Sec. 4. NRS 686B.110 is hereby amended to read as follows:

4-2 686B.110 1. [The] If the commissioner has determined that:

4-43 with the commissioner, unless the commissioner, within 15 business days

5-1 after the proposal is filed with him, determines that the proposal is

5-2 incomplete because the proposal does not comply with the regulations

5-3 adopted by him pursuant to this subsection.

5-4 5. If, in a competitive market, the commissioner finds that a rate no

5-5 longer meets the requirements of this chapter, the commissioner may

5-6 order the discontinuance of the rate. An order for the discontinuance of

5-7 a rate may be issued only after a hearing with at least 10 days’ notice for

5-8 all insurers and rate organizations that would be affected by such an

5-9 order. The order must be in writing and include, without limitation:

5-10 (a) The grounds pursuant to which the order was issued;

5-11 (b) The date on which the order to discontinue the rate becomes

5-12 effective; and

5-13 (c) The date, within a reasonable time after the date on which the

5-14 order becomes effective, on which the order will expire.

5-15 An order for the discontinuance of a rate does not affect any contract or

5-16 policy made or issued before the date on which the order becomes

5-17 effective.