SB93

Senate Bill No. 93–Committee on Commerce and Labor

(On Behalf of Legislative Committee on Workers’ Compensation)

February 3, 1999

____________

Referred to Committee on Commerce and Labor

SUMMARY—Revises provisions governing administration of state industrial insurance

system. (BDR 53-393)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: Yes.

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 the state industrial insurance system; creating a board of directors for the

system; establishing the powers, duties and membership of the board; establishing provisions relating to the conduct of the business of the board; providing for the compensation of the members of the board; 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 616A of NRS is hereby amended by adding thereto

1-2 a new section to read as follows:

1-3 "Board" means the board of directors of the state industrial insurance

1-4 system created pursuant to section 4 of this act.

1-5 Sec. 2. NRS 616A.025 is hereby amended to read as follows:

1-6 616A.025 As used in chapters 616A to 616D, inclusive, of NRS,

1-7 unless the context otherwise requires, the words and terms defined in NRS

1-8 616A.030 to 616A.360, inclusive, and section 1 of this act, have the

1-9 meanings ascribed to them in those sections.

1-10 Sec. 3. Chapter 616B of NRS is hereby amended by adding thereto the

1-11 provisions set forth as sections 4 to 11, inclusive, of this act.

1-12 Sec. 4. 1. The board of directors of the state industrial insurance system is hereby created. The 1-13 board consists of nine members who are

1-14 appointed as follows:

2-1 (a) Three members appointed by the majority leader of the senate, in

2-2 consultation with the minority leader of the senate.

2-3 (b) Three members appointed by the speaker of the assembly, in

2-4 consultation with the minority leader of the assembly.

2-5 (c) Three members appointed by the governor.

2. Each person who is appointed to serve as a member of the board:

2-6 (a) Must be a policyholder of the system or an employee of a

policyholder; and

2-7 (b) Must not be a legislator or an officer, employee or agent of the

2-8 judicial branch of this state.

3. In addition to the requirements set forth in subsection 2, at least

2-9 one of the three persons appointed to serve as a member of the board by

the majority leader of the senate, the speaker of the assembly and the

2-10 governor, respectively, must have previous experience in investments,

2-11 risk management, occupational safety, casualty insurance or law.

4. After the initial terms, members shall serve terms of 4 years,

2-12 except when appointed to fill unexpired terms. A person may not serve as

a member of the board more than two full terms consecutively.

2-13 5. A vacancy in the membership of the board must be filled for the

2-14 remainder of the unexpired term in the following manner:

(a) If the member who vacated the seat was appointed by the majority

2-15 leader of the senate or the speaker of the assembly:

(1) If the legislature is in session, by appointment of the majority

2-16 leader of the senate or the speaker of the assembly, as applicable; or

2-17 (2) If the legislature is not in session, by appointment of the

legislative commission.

2-18 (b) If the member who vacated the seat was appointed by the

governor, by appointment of the governor.

2-19 Sec. 5. 1. The board shall elect a chairman from among its

2-20 members.

2. The chairman shall hold office for a term of 1 year beginning on

2-21 July 1 of each year.

3. A chairman may not serve more than two full terms consecutively.

2-22 4. If a vacancy occurs in the chairmanship, the members of the

2-23 board shall elect a chairman from among its members for the remainder

of the unexpired term.

2-24 Sec. 6. The chairman of the board shall:

1. Schedule the meetings of the board; and

2-25 2. Ensure that the meetings of the board are conducted in an

2-26 efficient manner.

Sec. 7. 1. The board shall meet at least quarterly and may meet by

2-27 a call of the chairman or a majority of the members of the board.

2-28 2. Five members of the board constitute a quorum to transact all

2-29 business, and a majority of those present must concur on any decision.

Sec. 8. Each member of the board is entitled to receive for his

2-30 attendance at meetings of the board:

1. Compensation of at least $80 per day, as fixed by the board; and

2-31 2. The per diem allowance and travel expenses provided for state

2-32 officers and employees generally.

Sec. 9. The board shall:

2-33 1. Approve annual and biennial budgets of the system.

2. Approve investment policies of the system.

2-34 3. Appoint an independent certified accountant who shall provide an

2-35 annual audit of the state insurance fund and report to the board.

4. Before each legislative session, report to the legislature on any

2-36 recommendation for legislation that the board deems appropriate.

Sec. 10. The board may adopt regulations:

2-37 1. Necessary and proper for the governance and operation of the

2-38 board; and

2. To carry out the powers and duties of the board set forth in this

2-39 chapter.

Sec. 11. There is no liability in a private capacity on the part of the

2-40 board or any member thereof while carrying out the duties of the board.

2-41 Sec. 12. NRS 616B.014 is hereby amended to read as follows:

616B.014 1. Except as otherwise provided in this section and in NRS

2-42 616B.006, 616B.012 and 616B.021, the following records of the system

are confidential:

2-43 (a) Files of individual claimants and policyholders of the system.

2-44 (b) Any reports that contain information that would identify individual

claimants and policyholders of the system.

2-45 (c) Any proprietary information of the system.

2. The system may disclose such confidential information:

2-46 (a) To the governor and any member of his staff authorized to receive

2-47 such information;

(b) To a member of the legislature and any member of his staff

2-48 authorized to receive such information;

2-49 otherwise authorized to receive such information pursuant to specific

2-50 statute or administrative regulation; or

(d) Pursuant to a lawful order issued by a court of competent

2-51 jurisdiction.

3. A person who obtains such confidential information pursuant to

2-52 subsection 2 shall not disclose:

2-53 (a) The identity of an individual claimant or policyholder of the system; or

2-54 (b) Any proprietary information of the system,

except pursuant to a lawful order of a court of competent jurisdiction.

2-55 4. As used in this section, "proprietary information" means any

2-56 information which, if disclosed to the general public, may result in a

competitive disadvantage to the system, including, without limitation:

2-57 (a) Rules, criteria and standards for underwriting policies that are

applied by the system.

2-58 (b) Plans or other documents concerning the marketing or strategic

2-59 planning of the system.

2-60 products or services.

(d) Data that identify the share of the market of the system within each

2-61 class of risk.

2-62 (e) Any worksheets relating to the financial condition of the system,

except a financial statement resulting from an audit of the system conducted

2-63 pursuant to [~~NRS 616B.056]~~ section 9 of this act and a final report of an

audit conducted by the legislative auditor.

2-64 (f) The annual actuarial valuation and report of the soundness of the

2-65 system prepared pursuant to NRS 616B.056.

Sec. 13. NRS 616B.056 is hereby amended to read as follows:

2-66 616B.056 The manager shall:

1. [~~Approve annual and biennial budgets of the system.~~

2-67 ~~2. Approve investment policies of the system.~~

2-68 ~~3.]~~ Approve the appointment of investment counselors and custodians

of investments.

2-69 [~~4.]~~ 2. Approve the designation of banks as collection depositories.

[~~5.]~~ 3. Approve the appointment of an independent actuary and arrange

2-70 for an annual actuarial valuation and report of the soundness of the system

2-71 and the state insurance fund as prepared by the independent actuary.

[~~6. Appoint an independent certified accountant who shall provide an~~

2-72 ~~annual audit of the state insurance fund and report to the manager.~~

~~7.]~~ 4. Before each legislative session, report to the legislature on the

2-73 operation of the system . [~~and any recommendation for legislation which he~~

2-74 ~~deems appropriate.]~~

Sec. 14. NRS 616B.062 is hereby amended to read as follows:

2-75 616B.062 1. The [~~governor]~~ board shall appoint a manager to be in

charge of the operation of the system.

2-76 2. The manager is the chief executive officer of the system and , in

2-77 consultation with the board, is responsible for all duties of the system.

3. The manager shall serve at the pleasure of the [~~governor.]~~ board.

2-78 4. The manager must:

(a) Be a graduate of a 4-year college or university with a degree in

2-79 business administration or public administration or equivalent degree; and

(b) Possess at least 5 years’ experience in a high level administrative or

3-1 executive capacity, with responsibility for a variety of administrative

functions such as retirement, insurance, investment or fiscal operations.

3-2 5. Before undertaking the duties of the office, the manager shall qualify

3-3 by giving an official bond in an amount and with sureties approved by the

~~[governor.]~~ board. The manager shall file the bond with the secretary of

3-4 state. The premium for the bond must be paid by the system.

Sec. 15. NRS 616B.065 is hereby amended to read as follows:

3-5 616B.065 1. The manager shall select assistant managers [~~who]~~

3-6 whose appointments are effective upon confirmation by the board.

Assistant managers are in the unclassified service of the state and are

3-7 entitled to receive annual salaries fixed by the [~~manager.]~~ board.

2. The assistant managers shall serve at the pleasure of the manager [.]

3-8 , subject to the review of the board.

3-9 3. The assistant managers must be graduates of a 4-year college or

university with a degree in business administration or public administration

3-10 or an equivalent degree.

Sec. 16. NRS 616B.068 is hereby amended to read as follows:

3-11 616B.068 The manager is in the unclassified service of the state but is

3-12 entitled to receive an annual salary fixed by the [~~governor.]~~ board.

Sec. 17. NRS 616B.167 is hereby amended to read as follows:

3-13 616B.167 The manager:

1. [~~Has]~~ Subject to the authority of the board, has full power,

3-14 authority and jurisdiction over the system.

3-15 2. May perform all acts necessary or convenient in the exercise of any

power, authority or jurisdiction over the system, either in the administration

3-16 of the system or in connection with the business of insurance to be carried

on by the system [~~under]~~ pursuant to the provisions of chapters 616A to

3-17 616D, inclusive, of NRS, including , without limitation, the establishment

3-18 of premium rates [.] and the adoption of regulations.

3. May appoint in the unclassified service of the state no more than five

3-19 persons, engaged in management, who report directly to the manager or an

assistant manager. The [~~manager]~~ board shall designate these positions,

3-20 and may not change them without the approval of the personnel

3-21 commission. These persons are entitled to receive annual salaries fixed by

the [~~manager.]~~ board.

3-22 Sec. 18. As soon as is practicable after July 1, 1999:

1. The majority leader of the senate shall, in consultation with the

3-23 minority leader of the senate, appoint to the board of directors of the state

3-24 industrial insurance system:

(a) One person to a term that expires on June 30, 2001.

3-25 (b) One person to a term that expires on June 30, 2003.

4-1 2. The speaker of the assembly shall, in consultation with the minority

leader of the assembly, appoint to the board of directors of the state

4-2 industrial insurance system:

(a) One person to a term that expires on June 30, 2001.

4-3 (b) One person to a term that expires on June 30, 2003.

4-4 (c) One person to a term that expires on June 30, 2005.

3. The governor shall appoint to the board of directors of the state

4-5 industrial insurance system:

(a) One person to a term that expires on June 30, 2001.

4-6 (b) One person to a term that expires on June 30, 2003.

4-7 (c) One person to a term that expires on June 30, 2005.

Sec. 19. This act becomes effective on July 1, 1999.