MINUTES OF THE meeting
of the
ASSEMBLY Committee on Commerce and Labor
Seventy-First Session
April 11, 2001
The Committee on Commerce and Labor was called to order at 3:55 p.m. on Wednesday, April 11, 2001. Chairman Joseph Dini, Jr. presided in Room 4100 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Joseph Dini, Jr., Chairman
Ms. Barbara Buckley, Vice Chairman
Mr. Bob Beers
Mrs. Dawn Gibbons
Ms. Chris Giunchigliani
Mr. David Goldwater
Mr. Lynn Hettrick
Mr. David Humke
Ms. Sheila Leslie
Mr. Dennis Nolan
Mr. John Oceguera
Mr. David Parks
Mr. Richard D. Perkins
COMMITTEE MEMBERS ABSENT
Mr. Morse Arberry Jr.
STAFF MEMBERS PRESENT:
Vance Hughey, Committee Policy Analyst
Crystal McGee, Committee Policy Analyst
Darlene Nevin, Committee Secretary
OTHERS PRESENT:
Rusty McAllister, Vice President, Professional Fire Fighters of Nevada
Steven Turner, Director, Peace Officers Research Association of Nevada
Jim Fry, Risk Management Division, State of Nevada
Robert Barengo, Recreational Park Trailer Association and Western Thrift and Loan
Bill Garpow, Executive Director, Recreational Park Trailer Industry Association, Inc.
Mike Lawson, Nevada Department of Transportation
Joe Lamarca, Owner of Euphoria Salons and Day Spas
Mary Manna, State Board of Cosmetology
Alice A. Molasky-Arman, Commissioner of Insurance
Bob Ostrovsky, Legislative Advocate, Employers Insurance Company of Nevada (EICON)
John Sande, Legislative Advocate
Guy Perkins, Division of Insurance
David Guinan, Legislative Advocate
Matt Sharp, Legislative Advocate, Nevada Trial Lawyers Association
Don Aimar, Insurance Counsel and Hearings Officer, Division of Insurance
Bob Feldman, Nevada General Insurance Company and Auto Insurance America
Annie Rees, President, Nevada Bail Agents Association
Chairman Dini called the meeting to order at 3:55 p.m. A quorum was present. Chairman Dini introduced the new committee secretary of the Assembly Committee on Commerce and Labor, Rebekah Langhoff.
Chairman Dini opened the hearing on A.B. 345.
Assembly Bill 345: Revises provisions governing claims for compensation under industrial insurance for certain occupational diseases. (BDR 53-1267)
Assemblyman Goldwater, Assembly District No. 10, presented A.B. 345 to the committee. A.B. 345 would require cities and counties with self-insured workers’ compensation programs to transfer to the Division of Industrial Relations all claims concerning heart, lung and infectious diseases. This would guarantee a central location for all claims in the state. Such a provision would facilitate the research of such claims.
Secondly, Section 3 of A.B. 345 would allow for a hearings or appeals officer to award treble damages should there be an inappropriate denial in violation of Chapters 616A to 617, inclusive, of NRS. Mr. Goldwater viewed this as a deterrent to such violations or denials.
Rusty McAllister, Vice President, Professional Fire Fighters of Nevada, communicated to the committee the provisions of the heart and lung coverage provided firefighters and police officers. The coverage provided conclusive presumption as long as certain provisions were met. The firefighter or police officer would have to:
If these provisions were met, the disease would be presumed to have arisen from the duties of employment. However, Mr. McAllister reported that claims were “routinely denied and fought at all levels of the courts” by insurers. He related the additional stress and costs borne by the affected employees.
Mr. McAllister furnished that during the last session, the chairman of the Senate Committee on Commerce and Labor advised them he would help correct the abuses if “specific instances and patterns of abuse of the law” could be provided. However, investigating the cases has proven difficult. A.B. 345 would facilitate such research by providing a central location for the claims. A.B. 345 would also allow for an appeals judge to penalize the insurers if they abused or wrongly denied coverage.
Mr. McAllister related instances of both a firefighter and a police officer who were denied heart and lung coverage. Coverage was still pending for the firefighter. In the case of the police officer, the insurer told the appeals officer they would appeal her decision to the state Supreme Court regardless of how she ruled, in an attempt to have the heart and lung statutes ruled unconstitutional. They said it was unconstitutional for the Legislature to provide a benefit to one group that was not applied to other groups. The appeals officer upheld the decision to accept the claim because the police officer had met all the provisions of the law.
Mr. McAllister contended passage of A.B. 345 would enable them to gather enough information to establish that a problem existed. They could then present the evidence to the Legislature with hopes of finding a solution, and “reducing the number of frivolous denials, legal costs, court and appeals hearings and stress on the affected firefighters and police officers.” Mr. McAllister concluded, urging the committee’s support of A.B. 345.
Steven Turner, Director, Peace Officers Research Association of Nevada, representing professional peace officers in Nevada, agreed with the concerns presented by Mr. McAllister. He added that many agencies in the state already routinely tested for tuberculosis, and supported the provisions of A.B. 345
Chairman Dini asked if they supported the treble damages. Mr. Turner replied that they did.
There were no opponents to testify against A.B. 345. Chairman Dini closed the hearing on A.B. 345.
Chairman Dini announced that A.B. 626 had been pulled.
Assembly Bill 626: Requires money received by department of business and industry for certain investigative costs to be deposited in investigative account for financial institutions. (BDR 18-1445)
ASSEMBLYWOMAN LESLIE MOVED TO INDEFINITELY POSTPONE A.B. 626.
ASSEMBLYWOMAN BUCKLEY SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Chairman Dini opened the work session on A.B. 341.
Assembly Bill 341: Creates state board to review certain increases in rent relating to mobile home parks. (BDR 10-1087)
Assemblywoman Buckley summarized that A.B. 341 addressed rent justifications and related there were no proposed amendments. It had been clarified upon request that the twelve months mentioned in terms of rent increases were consecutive months. Ms. Buckley submitted, for the record only, a letter from Dee Bundell, written on behalf of the Southeast Valley Coalition of Concerned Citizens (Exhibit C).
ASSEMBLYWOMAN LESLIE MOVED TO DO PASS ON A.B. 341.
ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION WAS PASSED BY THOSE PRESENT. (ASSEMBLYMAN ARBERRY WAS NOT PRESENT FOR THE VOTE).
Chairman Dini opened the hearing on A.B. 628.
Assembly Bill 628: Revises provisions governing benefits for industrial insurance for certain police officers and firemen. (BDR 53-625)
Jim Fry, Risk Management Division, state of Nevada, stated A.B. 628 clarified “testing procedures, preventative treatment, and subsequent compensation” for police and firefighters who were exposed to tuberculosis. A.B. 628 would provide prophylactic treatment for police and firefighters who tested positive for tuberculosis whether or not the exposure occurred in the course of their employment.
Mr. Fry substantiated for the committee that insurers had been unwilling to provide compensation for police and firefighters who, during the annual physicals required by NRS 617.455 and NRS 617.456, tested positive for tuberculosis. Mr. Fry declared that such reluctance had caused “apprehension” and subsequent hearings and appeals for the exposed employees.
Mr. Fry maintained the insurers were reluctant to cover treatment because the employees could not prove their exposure was work-related. He expounded that unlike exposure to bodily fluids, exposure to tuberculosis was difficult to track because its transmission was airborne. Such exposure was common among firefighters, police and especially correctional officers. Mr. Fry informed the committee that NRS 616C.052 provided testing for tuberculosis post-termination and ensured compensation, without documented exposure, should the individual have a positive test. However, if the employee tested positive for tuberculosis on the annual physical exam, NRS 616C.052 would not provide compensation without a documented exposure.
Mr. Fry claimed A.B. 628 clarified tuberculosis testing procedures and changed the “directed testing post-termination” if the individual had previously tested positive for tuberculosis. He communicated that prophylactic treatment would cost 160 dollars in addition to doctor visits. The doctor visits would generally include two chest x-rays costing $50 apiece. Six months of a tuberculin medicine called INH would cost $60.
There being no further testimony, Vice Chairwoman Buckley closed the hearing on A.B. 628, and opened the hearing on A.B. 540.
Assembly Bill 540: Provides for identification, registration, regulation, taxation and other treatment of recreational park trailers as recreational vehicles. (BDR 43-799)
Robert Barengo, Recreational Park Trailer Association, introduced Bill Garpow, Executive Director, Recreational Park Trailer Industry Association, to the committee. Mr. Barengo presented A.B. 540 as a bill that defined a “recreational park trailer.” He submitted to the committee brochures that depicted recreational park trailers (Exhibit D, Exhibit E and Exhibit F). He noted this was a new product to Nevada, existent in many other states. Mr. Barengo pointed out LCB had difficulty regarding NRS and “qualifying” the definition with other legislation. Upon reviewing A.B. 540, the Department of Motor Vehicles (DMV) determined the proposed legislation was adequately covered in their regulatory structure. Therefore, they opposed any changes to the same and requested that Sections 5, 6, 7 and 8 of A.B. 540 be deleted. Mr. Barengo concurred with the DMV’s position.
Bill Garpow, Executive Director of Recreational Park Trailer Industry Association, Inc., a nonprofit trade association located in Newnan, Georgia, defined a recreational park trailer as a unit used exclusively as a seasonal and vacation home, no larger than 400 square feet. They were generally located in recreational vehicle parks where a space would be leased on which the vehicle would remain year round. Their average cost was $29,000. The trailers were not considered manufactured homes or primary dwellings because of their size, and their structure had to comply with the national safety standards put forth in ANSI A119.5. These standards were explained in the brochure entitled “Recreational Park Trailer Industry Association: ANSI A119.5 Standards Program” (Exhibit D). Members of the Recreational Park Trailer Industry Association, Inc., were required to build to those safety standards.
Mr. Garpow reported there were approximately 8,000 recreational park trailers sold annually in the United States. They were sold in all states except Hawaii, Nevada, and Alabama. Mr. Garpow further related the average age, occupation, education and income of recreational park trailer users. Ninety-three percent of recreational park trailers were located in recreational vehicle parks and used seasonally. A small percentage was used as hunting or fishing cabins and 33 percent were utilized by “snowbirds,” those who traveled southward in the winter months. He acknowledged these travelers contributed about $30 per person daily to Nevada’s economy. Mr. Garpow added that most would travel home to receive any medical or legal services and would therefore not “burden any local unit of government.”
Mr. Garpow submitted these recreational vehicles were not included in the current statutes, as they were not considered manufactured homes or recreational vehicles. Therefore, they could not be purchased in Nevada. Mr. Barengo interjected they had worked with Rene Diamond, Manufactured Housing, and she supported A.B. 540 as it was written.
Assemblyman Nolan asked Mr. Garpow to explain the connection between the ANSI standards and manufactured housing. Mr. Garpow replied that ANSI standards applied to the manufactured housing industry about 25 years ago. Since that time the Department of Housing and Urban Development (HUD) established the safety standards. He related that another consensus standard was being developed. Mr. Garpow explained that the ANSI standard was one of consensus. The committee met every four years and was a balance of manufacturers, suppliers, dealers, park owners, individuals, government regulators, insurance companies, and financial firms. A two‑thirds majority was required to make changes, and the standards were specific to recreational park trailers. Mr. Garpow offered copies of the ANSI standards to the committee (Exhibit G). Chairman Dini asked Mr. Garpow to provide the secretary with the ANSI standards so copies could be made for the committee.
Assemblyman Hettrick related his mother had such a trailer. He noted the trailers appreciated in value. He reiterated that “snowbirds” spent money in the economies they visited and did return home for their medical needs. He perceived A.B. 540 would be good for Nevada.
Mike Lawson, representing the Nevada Department of Transportation, conveyed their support of A.B. 540 with the deletion of Sections 5, 6, 7 and 8. He noted he had worked with Mr. Garpow in the interim, and submitted a statement from the Nevada Department of Transportation, which expressed their concerns with A.B. 540 as written (Exhibit H).
As there was no further testimony, Chairman Dini closed the hearing on A.B. 540.
ASSEMBLYWOMAN BUCKLEY MOVED TO AMEND AND DO PASS ON A.B. 540.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY ALL THOSE PRESENT. (ASSEMBLYMAN ARBERRY WAS NOT PRESENT FOR THE VOTE).
Chairman Dini opened the work session on A.B. 422 and asked the secretary to distribute the proposed amendment to the committee members.
Assembly Bill 422: Provides for external review of certain determinations made by managed care organizations and health maintenance organizations. (BDR 57-1092)
Ms. Buckley provided the committee with her proposed amendment to A.B. 422 (Exhibit I). Ms. Buckley reminded the committee that A.B. 422 addressed external reviews of denials by managed care organizations. The committee had been working to reconcile A.B. 422 with similar legislation proposed in the Senate. The only issue not yet resolved was the determination of the entity that would select the review organization.
Managed care organizations wanted the insurance companies to choose from a list of four. However, the patients and the physician community felt the decision should rest with an independent entity, and that the Office of Health Care Assistance should choose.
As a compromise, the proposed amendment would allow the Office of Consumer Health Assistance to choose the reviewer. That would be their only involvement, thus lessening the likelihood of delays. The review organization would be chosen in order from a list of licensed organizations.
Ms. Buckley proposed that if the insurance companies made the choice A.B. 422 would “lose its independence.” She also compared this provision with the Insurance Commissioner’s model whereby the Insurance Commissioner selected the entity that conducted a review. Basically, this provision allowed for an independent party to review medical records and give their opinion.
Chairman Dini presented it would be appropriate to accept a motion of “amend and do pass,” and that once presented on the Floor in its reprinted version, should there be any questions, it could be placed on the desk. The committee agreed.
ASSEMBLYMAN GOLDWATER MOVED TO AMEND AND DO PASS ON A.B. 422.
ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.
Chairman Dini asked if there was any discussion. He clarified he was not trying to “railroad” the legislation; rather, given the “major” amendments, this procedure would be best.
THE MOTION WAS CARRIED UNANIMOUSLY BY THOSE PRESENT. (ASSEMBLYMAN ARBERRY WAS NOT PRESENT FOR THE VOTE).
Chairman Dini asked if there was any opposition to A.B. 628, which was heard earlier in the hearing. There was none.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO DO PASS ON A.B. 628.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION CARRIED. (ASSEMBLYMAN HETTRICK VOTED NO.
ASSEMBLYMAN ARBERRY WAS NOT PRESENT FOR THE VOTE).
Assemblyman Hettrick said he did not disagree with the coverage being provided for firefighters and police officers. He opposed A.B. 628 because he considered it unfair that two groups were singled out for coverage, when all workers had the opportunity to be exposed to tuberculosis in the workplace without documentation.
Assemblyman Nolan supported A.B. 628 based on his familiarity with emergency response, in particular with regard to tuberculosis. He established that “first responders” encountered a “unique set of circumstances” which exposed them to an occupational hazard not encountered by others.
Victims of tuberculosis would confine themselves to bed for several days, not knowing they had the disease, and eventually would call 911. Because tuberculosis was an airborne disease, anyone who entered the victim’s room would immediately be exposed. Emergency personnel could not possibly protect themselves on every respiratory distress call, and the diagnosis of tuberculosis would not be available until sometime after the emergency response. Mr. Nolan was aware of several paramedics who contracted tuberculosis through the situations he described.
Assemblyman Oceguera informed the committee he had a positive skin test for tuberculosis, and that firefighters were exposed “almost on a daily basis” without being able to determine specifically where or when they were exposed.
Speaker Perkins disclosed for himself and Mr. Oceguera, for the record, their professions as a law enforcement officer and firefighter respectively.
Assemblyman Hettrick informed the committee that his son was a law enforcement officer in Douglas County. He verbalized his opposition to A.B. 628 was not intended as a negative stand against law enforcement officers or firefighters, but was a stand for fairness.
Chairman Dini opened the hearing on A.B. 551.
Assembly Bill 551: Revises provisions relating to practice of cosmetology. (BDR 54-1133)
Ms. Giunchigliani informed the committee that A.B. 551 was written on behalf of a businessperson in light of changes in cosmetology establishments. Salons were larger and provided more features than traditional salons. She pointed out that the proposed amendment (Exhibit J) basically “rewrote” A.B. 551, and was supported by both the cosmetology board and the business individual.
Joe Lamarca, owner of Euphoria Salons and Day Spas, presented A.B. 551 would enable him and his peers to compete with department stores with regard to make-up sales.
Mary Manna, State Board of Cosmetology, acknowledged Mr. Lamarca for negotiating with them and taking into consideration their concerns with regard to health and safety. She thanked the committee as well, and expressed her support of A.B. 551 and the proposed amendments.
Chairman Dini asked who decided the passing exam score of 75 percent on the sanitation exam as proposed by the amendment. Ms. Manna responded it was a passing score currently in their regulations. Chairman Dini sought clarification that this score was separate from Section 1, which spoke to the food or beverage consumption. Ms. Manna said that was correct.
Assemblyman Beers asked if the proposed amendments replaced or supplemented sections of A.B. 551. Ms. Manna responded they were replacements.
Chairman Dini informed the committee that Sandra Parker, owner of A Class Act Salon, had sent a memo (Exhibit K) in opposition to A.B. 551. He confirmed, however, that her opposition was based on A.B. 551 prior to the amendments. Chairman Dini closed the hearing on A.B. 551.
ASSEMBLYMAN HETTRICK MOVED TO AMEND AND DO PASS ON A.B. 551.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT. (ASSEMBLYMAN ARBERRY WAS NOT PRESENT FOR THE VOTE; ASSEMBLYMAN GOLDWATER ABSTAINED).
Chairman Dini opened the hearing on A.B. 618.
Assembly Bill 618: Makes various changes relating to regulation of insurance. (BDR 57-564)
Alice A. Molasky‑Arman, Commissioner of Insurance, thanked the committee for introducing A.B. 618, which she considered “vital” to preserving state regulation of insurance. She viewed A.B. 618 as their response to the Federal Financial Modernization Act. It also included provisions for patient protection and viatical settlements. Ms. Molasky‑Arman commended the Legislative Counsel Bureau for their drafting of A.B. 618 and acknowledged the advisory committees as well.
Ms. Molasky-Arman referred to three amendments she expected to see proposed (Exhibit L). The first amendment, proposed by the Division of Insurance, deleted reference to NRS 692C.420. The Division of Insurance and the Nevada Insurance Guaranty Association would jointly propose the second amendment. The third amendment, she understood, would be proposed by the Employers Insurance Company of Nevada.
Ms. Molasky-Arman provided the committee with the Insurance Division’s “Presentation to the Assembly Commerce and Labor Committee,” (Exhibit M). James R. Jeppson, Chief Insurance Assistant, Division of Insurance, provided “A.B. 618 (2001) Section Summary” (Exhibit N).
The first portion of the presentation addressed viaticals. Viatical settlements involved the purchase of the owner’s or beneficiary’s rights to a life insurance policy. Viatical settlements resulted in illegal transactions and could cause a financial loss to Nevada if not properly regulated. Ms. Molasky-Arman explained two illegal schemes that she referred to as “Cleansheeting” and “Senior Settlements.”
She informed the committee that the United States Postal Service, the Federal Bureau of Investigation, the Internal Revenue Service, the State Securities Department and the Division of Insurance had become involved in investigations of illegal viatical transactions. A.B. 618 would establish legal guidelines to protect consumers as well as licensing guidelines for those who marketed viatical settlements. Pages 11 through 14 of Exhibit M outlined the provisions of A.B. 618 as related to viatical settlements.
The second major portion of A.B. 618 was a response to the Financial Services Modernization Act, also known as the Gramm-Leach-Bliley Act (GLBA). The GLBA provided that a state’s insurance activities would be regulated by the state. Other provisions in A.B. 618 prevented state laws and regulations from discriminating against banks and bank affiliates.
The GLBA provided guidelines with respect to the sharing of consumers’ nonpublic information with affiliates and “third parties.” The state would also be able to adopt regulations, if consistent with the GLBA, and provide greater protection. If the state failed to adopt regulations, it would be subject to regulations established by the Federal Deposit Insurance Corporation (FDIC). Section 135 provided for the Division of Insurance, or the Insurance Commissioner, to adopt regulations to protect confidentiality and information sharing.
GLBA required state insurance regulators to assure federal regulators they could maintain confidentiality of information received from them, as well as personal information obtained from consumers when filing complaints. The commissioner was required to sign agreements regarding the sharing of investigative materials with the Federal Reserve System, the Office of Thrift Supervision (OTS), and the Office of the Comptroller of Currency (OCC). The Insurance Commissioner was also having an agreement with the FDIC reviewed by their deputy Attorney General. Section 63 proposed changes that would provide for the confidentiality of records.
A major provision of the GLBA was the stipulation that if, by November 12, 2002, “the majority of states had not enacted uniform laws and regulations regarding agent licensing or reciprocal laws and regulations for the licensing of nonresidents,” the National Association of Registered Agents and Brokers (NARAB) would be created. NARAB would be a national licensing entity under which agents and brokers could be licensed in several states without applying to each state individually. Sections 74 through 117 “rewrote” the chapter that provided for the licensing of agents and brokers following the Producer Licensing Model of the National Association of Insurance Commissioners (NAIC). The NAIC based the licensing model on the GLBA requirements for reciprocity and uniformity. Ms. Molasky‑Arman emphasized the need to maintain licensing jurisdiction at the state level so the state could better enforce insurance laws to protect its citizens.
A.B. 618 created a new single license as an insurance producer and eliminated the agent and broker licenses. The major features included:
Sections 100 through 117 addressed producer licensing and retained state regulation on the following:
Sections 118 through 123 addressed insurance consultants. It allowed for the inclusion of nonresidents and made the licensing and disciplinary procedures consistent with the producer licensing section of A.B. 618.
Sections 124 through 133 made changes with regard to adjusters, appraisers and surplus line brokers. Section 124 provided that an adjuster whose license expired would be exempt from retaking the examination if he applied and was relicensed within six months of the expiration. Section 125 provided an adjuster could be fined up to $1,000 for each violation of operating without a license. Section 130 provided for a fine of up to $1,000 for certain license violations by a motor vehicle appraiser. Other amendments were described as “technical.”
Sections 138 through 147 applied to funeral and burial contracts. Changes provided that the buyer of a “Pre-need” contract could receive interest on trust funds if they had to cancel a contract. Nevada had been recognized as providing poor consumer protection with regard to “Pre-need” contracts. A.B. 618 also provide for an administrative fine to be imposed on those who violated rules governing prepaid contracts.
A.B. 618 addressed benefits mandated by the Woman’s Health and Cancer Rights Omnibus Appropriations Act (WHCRA). It improved the benefits for mastectomies and reconstructive surgeries and required that notice of these benefits be provided to the policyholders. Chapters affected were:
Sections 150 through 166 applied to blanket health insurance laws and provided for:
Sections 158 through 160 provided for conversions of health insurance policies to make them consistent with the Health Insurance Portability and Accountability Act (HIPAA). These provisions:
Sections 169 through 173 proposed the following changes to the Insurance Holding Company Law to comply with the GLBA:
Ms. Molasky-Arman reported to the committee that these changes necessitated deletion of the reference to NRS 692C.420. She believed that when they initially proposed an amendment to NRS 692C.420, and then deleted the amendment, the entire section was proposed to be deleted. She emphasized that this provision was a necessary accreditation standard and asked the committee’s serious consideration of the amendment.
Sections 174 through 176 addressed mutual insurers with regard to valuation methods. Section 174 provided that the Insurance Commissioner could approve the valuation formula should a stock insurer choose to become a mutual insurer. Or, if so ordered, valuation could be determined by an examination of the insurer or an appraisal committee. Section 176 provided the same “enabling provision” to address a mutual insurer becoming a stock insurer.
A.B. 618 also provided that a mutual insurer could transfer to a new state of domicile should the current state of domicile not have “reasonable terms and conditions” for reorganizing into a stock company.
Lastly, Ms. Molasky-Arman pointed out other provisions, which gave the Commissioner of Insurance authority to adopt regulations:
Assemblyman Nolan asked Ms. Molasky-Arman how many other states had adopted similar legislation and whether or not this was modeled after other states. Ms. Molasky-Arman replied these provisions were identical to those introduced in at least 29 other states. She added that Congress determined the National Association of Insurance Commissioners would decide which states met the standards for uniformity and reciprocity.
Assemblyman Beers asked the disadvantage of letting the federal government “shoulder the burden.“
Ms. Molasky-Arman replied that if the formation of NARAB was necessitated, the state would lose approximately 25 percent, or $1.6 million, worth of revenues from licensing fees. In addition, Ms. Molasky-Arman added, if insurance companies were to have a national charter, the loss in premium taxes would be at least $32.3 million.
Assemblyman Beers asked Ms. Molasky-Arman if the federal government could require Nevada to recognize the license of an entity to do business solely within Nevada. Ms. Molasky-Arman replied they could. She also projected her feelings that the issue with NARAB involving agents and brokers would not be the “end of their challenge.”
Chairman Dini asked Ms. Molasky-Arman what kinds of insurance the banks could sell under the federal law. Ms. Molasky-Arman replied they could sell all kinds, but they could not underwrite or act as an insurer.
Chairman Dini asked if there were further questions from the committee. He thanked Ms. Molasky-Arman for her concise testimony and asked if she could be available for the remainder of the hearing.
Bob Ostrovsky, Legislative Advocate, Employers Insurance Company of Nevada (EICON), related EICON was a “home officed” mutual workers’ compensation company, perhaps the only one in Nevada. EICON served on the advisory board to the Commissioner to assist in the drafting of A.B. 618. Mr. Ostrovsky stated that EICON supported Ms. Molasky-Arman’s efforts to “modernize” the state’s insurance codes to protect citizens and maintain the state’s right to “control what happens in its borders.”
Mr. Ostrovsky presented his amendments to the committee (Exhibit O). The amendments addressed insurer demutualization and insurance holding companies. He reported they worked closely with the Commissioner and included the amendments she requested.
Chairman Dini asked if the conversion of a mutual insurer to a stock insurer was already addressed by NRS 693A.360. Mr. Ostrovsky replied it was. Chairman Dini asked why they needed the amendment. Mr. Ostrovsky responded NRS 693A.360 permitted the transition from mutual insurer to stock insurer, but did not provide guidelines for the mutual company or the Commissioner. Mr. Ostrovsky’s proposed amendment offered guidance by which the mutual holders could determine if a particular course of action was appropriate or not, and gave the authority to the Commissioner.
Mr. Ostrovsky conveyed that, in accordance with the federal government’s directive, A.B. 618 created holding companies. He added that the creation of mutual holding companies was not part of the original Commissioner’s bill and clarified they were not asking the committee to make a policy decision about whether or not companies could demutualize. They were actually seeking authority for the Commissioner to oversee the demutualization process and felt their proposals provided the authority and flexibility necessary for the Insurance Commissioner to determine what was in the best interests of the mutual holders. Mr. Ostrovsky reasoned a two-thirds majority vote would be required of the mutual holders for the purpose of leveling the playing field for companies doing business in Nevada.
Mr. Ostrovsky submitted that without the proposed language, a mutual insurer could redomesticate in another state with “friendlier language.” He assured the committee EICON would like to continue being the “number one seller of workmen’s compensation insurance” in Nevada and perhaps of “other products in a holding environment.”
Mr. Ostrovsky specified that Sections 2 through 25 addressed the demutualization process and gave the Commissioner “broad authority” in reviewing the process. The Commissioner would determine whether or not the plan of conversion was fair and equitable. Without the approval, any demutualization or development of holding companies would not be permissible. Mr. Ostrovsky added that the details of the amendment were carefully reviewed by the Commissioner’s office and asked the committee to consider the amendments for all mutual companies in Nevada.
John Sande, speaking as a fiduciary and member of the board of directors of EICON, described A.B. 618 as providing “latitude for the corporation of the future.” He emphasized the importance of holding companies as their subsidiaries engaged in various lines of business.
Alice Molasky-Arman acknowledged her office had worked with Mr. Ostrovsky. She felt the proposed amendments gave the Insurance Commissioner guidance for reviewing proposed demutualizations and the establishment of mutual holding companies.
Chairman Dini asked about the $2,450 application fee specified in Section 5 (Exhibit O) for converting from a domestic mutual insurer to a stock insurer. Ms. Molasky-Arman responded the increase from $1,000 to $2,450 was made because $2,450 was the current fee for the review of licensing applications for insurance companies. Mr. Ostrovsky added that EICON had agreed to that change.
Chairman Dini further inquired why, in Section 5, subsection 2 (Exhibit O), a vote of “not less than two thirds of the members of the board of directors” was required in lieu of the previous NRS stipulation of not less than three quarters of the board.
Mr. Ostrovsky replied most of the states required not less than two thirds. They had discussed this change with the Commissioner and two thirds seemed suitable. Ms. Molasky-Arman confirmed Mr. Ostrovsky’s statement. She explained that those states that stipulated “not less than two thirds” were states that offered greater protections for the citizens in their provisions.
Chairman Dini asked for explanation of Section 8, subsection 2(c) (Exhibit O), whereby the Commissioner could consider “Whether the plan of conversion includes preemptive rights for policyholders to purchase securities offered in the initial sale of securities by the new stock insurer.” Mr. Ostrovsky responded the items in this section were those the Commissioner could consider as relevant factors. He clarified the Commissioner was “being instructed to determine whether or not these rights were granted to policyholders to protect the current mutual holders.”
Chairman Dini asked if there was “anything unique” in the wording in Section 9 (Exhibit O), which stated:
A plan of conversion shall be approved only if not less than two-thirds of the policyholders voting in person or by proxy at the meeting vote in favor of such plan of conversion.
He also questioned, in Section 9 (Exhibit O), the provision that stated:
The Commissioner shall enter a final order approving the application to convert to a stock insurer within ten days after receiving a valid certification from the mutual insurer setting forth the vote and certifying that the plan of conversion was approved by not less than two-thirds of the policyholders voting in person or by proxy on the plan of conversion.
Chairman Dini asked how this language affected the involvement of the Insurance Commissioner.
Mr. Ostrovsky sought clarification from Chairman Dini that his question was in regard to the Commissioner’s role in the vote. Bob Ostrovsky explained the provision was intended to assure that mutual holders had a fair vote, supervised and directed by the Commissioner, so the company could not “control its own vote.
Chairman Dini asked if Section 10 should have referenced Section 13 instead of Section 14 (Exhibit O). Mr. Ostrovsky informed Chairman Dini that he was correct; the reference should have been to Section 14. Chairman Dini noted that portion of the amendments needed to be corrected.
Chairman Dini asked Mr. Ostrovsky to explain the provision in Section 14, subsection 2(c) (Exhibit O), which stated:
The acquisition would be consistent with the legislative purpose of the Insurers Demutualization Act to permit conversions on terms and conditions that are fair and equitable to the policyholders.
Mr. Ostrovsky responded that this was in line with the provisions of Section 2 whereby the Commissioner would not approve an application unless he or she found the acquisition to be consistent with legislative purpose. Legislative purpose would be, as stated in Section 2, that the conversion of a domestic mutual company to a stock company was in the public interest. The Insurance Commissioner would determine whether or not the demutualization was in the best public interest in order for it to occur. That was the intent.
Chairman Dini, referring to Section 14, subsection 5 (Exhibit O), which stated, “The commissioner may hold a public hearing on an application for acquisition filed,” asked how the public hearing affected the Commissioner’s control.
Mr. Ostrovsky responded that the acquisition referred to was that of 5 percent or more of the stock in a mutual company, as stated in Section 14, subsection 1 (Exhibit O). Ms. Molasky-Arman felt the provision in question would impair the Commissioner’s discretion to hold a hearing. She pointed out acquisitions and mergers did not require a hearing, but that it had been her practice to hold one. Mr. Ostrovsky added that it was not their intent to remove the Commissioner’s ability to hold a hearing. He described it as a “good catch.”
Chairman Dini asked for proposed language to correct Section 14, subsection 5 (Exhibit O). Ms. Molasky-Arman suggested deleting “unless the board of directors of the new stock insurer has approved the acquisition.”
Vance Hughey, Legislative Counsel Bureau Research Division, and Chairman Dini asked if Section 14, subsection 3 (Exhibit O) should reference subsection 2(b), instead of subsection 1(b), as written. Mr. Ostrovsky replied they were correct; it should be subsection 2(b).
Chairman Dini asked if this was derived from the NAIC Model Act or other model acts. Ms. Molasky-Arman replied it was not. The NAIC had not yet established a model act regarding the demutualization of insurers. They had written a report referred to as a “white paper” that discussed the issues involved and provisions that might best be considered in a future model act. She understood that the proponent of this amendment utilized that “white paper.” Mr. Ostrovsky said they used the “white paper” and language from two other states that used that same “white paper” to develop this language.
Assemblyman Beers posed a hypothetical situation regarding the provisions set forth by Section 31 (Exhibit O). He asked if he had sold his life insurance policy after receiving a terminal prognosis, and then died one week later, whether the entire transaction would be “unwound.” Ms. Molasky-Arman responded that Section 31 provided the right for the insured to cancel the viatical settlement within 15 days, even if he had received proceeds from the sale of his life insurance. It also stated that if the insured died during that 15-day period, the settlement would be terminated.
Assemblyman Beers asked for further clarification of the provisions of Section 31 (Exhibit O). Ms. Molasky-Arman restated Section 31 offered protection for the policyholder by providing him or her the opportunity to change their mind. She then deferred to Guy Perkins of the Division of Insurance. Mr. Perkins confirmed Ms. Molasky-Arman’s explanation. He added it was not a new concept and was used in both life insurance, without viatical settlements, and health insurance. It gave the insured a “second chance” to rethink his or her decision.
Chairman Dini and Mr. Beers clarified that the responses addressed the first sentence of Section 31 (Exhibit O). Mr. Beers’ question was related to the second sentence of Section 31, which stated, “If the insured dies during that period, the settlement is terminated, but the proceeds must be repaid to the provider of the viatical settlements.” Mr. Beers claimed that the second sentence assumed he was “making a mistake.”
Ms. Molasky-Arman responded that if the policyholder died within the 15-day period, he or she would have received only a portion of the face amount of the policy. This would mean that his beneficiary would not receive the whole face amount. She maintained this ensured that the beneficiary would receive the full face amount.
Mr. Beers asked Ms. Molasky-Arman if she did not think that the person dying had the right to cash in on his or her life insurance policy. He understood that under A.B. 618 the viatical companies would deny the policyholder that opportunity. Ms. Molasky-Arman replied that the life insurance company would be the payor of the proceeds upon death. Mr. Beers claimed the viatical settlement company, who would give him a portion of the face value, would “not make the offer any more.”
Ms. Molasky-Arman expounded that if, for example, the death benefit was $100,000, and the agreement for the viatical was $90,000, the $100,000 death benefit would be paid and the estate would then pay back the $90,000.
Mr. Beers retorted the policyholder would not have the opportunity to enter into a viatical settlement if terminally ill because the viatical companies, having read the provisions of Section 31 (Exhibit O), would not want to invest time and money in a transaction that could be undone in two weeks.
Ms. Molasky-Arman responded that insurance companies were scammed by lack of information on the insured. Mr. Beers interrupted that the insured could have had the policy 50 years when given the terminal prognosis. Mr. Dini interjected it was still a $100,000 policy.
Mr. Beers maintained a viatical settlement company, having read Section 31 (Exhibit O), would not have offered an agreement to pay such a significant portion of the policy value, knowing a terminally ill policyholder had the fifteen‑day window in which the viatical settlement could be terminated. Chairman Dini added the viatical company would not know the policyholder was to die in fifteen days. Mr. Beers claimed that such circumstances were possible. Mr. Dini concluded Mr. Beers’ concerns would need to be addressed.
David Guinan, Legislative Advocate, Nevada Insurance Guaranty Association, presented an amendment to A.B. 618 (Exhibit P). The amendment would add a new section changing NRS 687A.033. Mr. Guinan explained that there was an amendment to the Nevada Insurance Guaranty Association Act during the last session, by which any claim made by or against an insured, having a net worth of $25 million or more, would not be a covered claim against the Nevada Insurance Guaranty Association.
The Nevada Insurance Guaranty Association wanted assurance this provision would not delay benefits to employees. They felt the proposed amendment would clarify that the net worth exclusion did not apply to an employee’s claim for workers’ compensation.
Matt Sharp, Legislative Advocate, Nevada Trial Lawyers Association, testified against A.B. 618, based solely on Section 63, which dealt with access to public information. Their opposition would not impact the requirements of the Gramm‑Leach‑Bliley Act (GLBA) or any of the issues discussed by the Insurance Commissioner. Mr. Sharp was opposed to Section 63, subsection 7 because it:
provided that any document, any information obtained by the commissioner as part of an investigation of an insurance company was confidential, privileged and not subject to any discovery in any court of law period.
Mr. Sharp insisted such a provision would have serious consequences with regard to knowing the financial characteristics of an insurance company as well as knowing their practices. He related an occurrence in Wisconsin by which an insurance company was putting the health of patients at risk. The only means by which they uncovered these activities was by locating documents gathered from an investigation conducted by the Wisconsin Commissioner of Insurance. Mr. Sharp maintained that public accountability and insurance companies went “hand in hand.” He asserted any secrecy was not “good government.”
Assemblyman Nolan quoted Section 63, subsection 7, which Mr. Sharp referenced, as providing that “documents, materials and other information in the possession or control of the division which are obtained by or disclosed to the commissioner or any other person in the course of an investigation made under this Title.” Mr. Nolan interpreted this to mean that the materials used for the purposes of the investigation were to remain confidential. He added Ms. Molasky-Arman had stated this language was consistent with legislation in 26 other states.
Mr. Sharp was not aware of any state that had the same language. His interpretation of Section 63, subsection 7, was it applied to the course of the investigation as well as to its conclusion. He noted Section 6 and NRS 679B.190, subsection 3, already protected the Commissioner with regard to ongoing investigations. This, he perceived, was much broader. He interpreted ”this Title,” as used in Section 63, subsection 7, as applying to any investigation under Title 57, which would apply to “virtually anything the insurance company was doing.” Mr. Sharp emphasized his concern the insurance company could consider any information confidential and not disclose it without prior consent
Assemblyman Nolan asked Mr. Sharp if he, as counsel, could subpoena the same type of documents and information the Commissioner possessed, if he had a legitimate interest or a pending civil action.
Mr. Sharp read from subsection 7, “documents are not subject to subpoena . . . not subject to discovery or admissible in evidence in any private civil action.” He understood this to mean any information gathered by the insurance company in the course of an investigation was privileged information and not subject to any type of “civil discovery.” Mr. Sharp considered the language very broad, giving the court very little discretion.
Mr. Sharp stated there were already protections in place. The courts restricted the amount of information produced, followed particular rules, and recognized certain privileges. He also maintained there was protection in the current laws that existed for insurance companies.
Mr. Sharp submitted that this type of provision did not apply to his representing his clients. Rather, it would affect one’s investigation of insurance companies. He cited the inability of investigating insurance companies that appeared defunct, yet claimed their parent company was backing them. He maintained their stability could not really be determined without obtaining the materials from the Insurance Commissioner. He again accentuated the importance of public access to information that would not be allowed under A.B. 618.
Assemblyman Nolan suggested the committee have their legal counsel study Section 63, subsection 7. He interpreted “in the course of an investigation” to mean it was limited to the information available “in the course of the investigation for the purposes of an investigation.” He acknowledged there was “proprietary information and personal case information” that had to be protected. Chairman Dini invited the Insurance Commissioner and the Attorney General’s Office to address the concerns of Mr. Nolan and Mr. Sharp.
Ms. Molasky-Arman introduced Don Aimar, Insurance Counsel for the Division of Insurance. Ms. Molasky-Arman divulged that investigations did not include examinations of the Commissioner. Those were conducted under different provisions, beginning with NRS 679B.230, and were consistent with provisions in other states.
Examinations required the working papers of the examiner to be confidential and not subject to subpoena. Ms. Molasky-Arman further explained examiners in Nevada were required to report to the Commissioner, and the Commissioner was required to make the report public. She noted that requirement did not exist in all states, and maintained the public had the right to know the financial condition of an insurance company as well as its market conduct practices. Ms. Molasky-Arman reiterated the aforementioned policy applied to examinations, which were neither conducted nor affected by the provision in question.
Ms. Molasky-Arman clarified that A.B. 618, subsection 7, was intended to “protect confidential informants, people who will not come forward to notify us of violations if they are not assured that their information will remain confidential.” She provided that investigative documents consisted primarily of attorney work product and was supposed to be privileged information. Ms. Molasky-Arman added protecting that information was difficult because they were a public agency.
Ms. Molasky-Arman further clarified that the Insurance Division was bound by agreements with federal regulators to “maintain all of their exchange of information on investigations and consumer complaints in complete confidence.” The information could be used only with permission from the federal regulatory agency. The same provision applied to the Insurance Division; they could not disclose information without permission from the Insurance Commissioner.
Don Aimar, Insurance Counsel and Hearings Officer, Division of Insurance, affirmed Mr. Nolan’s interpretation of subsection 7 as referring to investigative materials obtained by the Insurance Division in the course of enforcement. He also remarked that the wording of the entire section was taken out of the NAIC Model Act for holding companies, wording required under the GLBA. Such language was necessitated by the exchange of information amongst insurers, banks, affiliates, and holding companies and the division’s obligation to keep the information confidential.
Mr. Aimar claimed the issues raised by the trial lawyers were an attempt to use the Insurance Division’s investigative records to obtain information they should acquire through district court proceedings. Mr. Aimar felt Mr. Sharp’s argument was “misplaced” and that Assemblyman Nolan was correct in his interpretation of the provision.
Vice Chairwoman Buckley interpreted subsection 7 as did Mr. Sharp. She maintained the wording “obtained in the course of an investigation” differed from “during” the course of the investigation. If the documents and materials were obtained “in the course,” they were confidential. She further claimed that if the intent was only to keep the information confidential during the scope of an investigation that was already the law.
Vice Chairwoman Buckley acknowledged that Page 17, lines 32 through 38, stipulated the Commissioner could release information “deemed appropriate” if it would not harm the investigation. Ms. Buckley perceived that provision as reversing existing law. She voiced her concerns about “public records and public confidence and shielding records that consumers may need.” Ms. Buckley suggested consulting the Legislative Counsel Bureau.
Ms. Giunchigliani, recalling Ms. Molasky-Arman’s testimony that the language of Section 63 protected informant confidentiality, claimed the language was not “standard whistleblower language.” She stated language already present in the statutes might address confidentiality for informants. Ms. Giunchigliani interpreted Section 8 as preventing anyone from testifying in a private civil action and wondered how that would affect one who wanted to file a complaint against an insurance company.
Ms. Molasky-Arman responded that subsection 9 provided for the confidential sharing of information received from and provided to regulatory agencies. Ms. Giunchigliani replied that was true of subsection 9, but subsection 8 provided “neither the commissioner nor any person who has received documents, materials or other information may testify concerning them in any private civil action.”
Don Aimar explained that subsection 8, “Neither the commissioner nor any person who has received the documents,” referred to personnel of the Division who received information in the course of an investigation. It did not apply to insurance companies, brokers, agents or individuals who requested information to be given someone involved in a lawsuit. The information was that received by the state in its capacity as a regulator.
Ms. Giunchigliani maintained that Section 63 was still unclear in layperson’s terms and suggested it be clarified. She referred to the language of Section 63 which said “Except as otherwise provided in subsections 5 through 10, the papers and records must be open to public inspection.” She perceived the new sections as precluding “whistleblowers” from bringing forth documents as well as preventing an individual’s access to information.
Ms. Molasky-Arman agreed with Ms. Giunchigliani with regard to subsection 8. She also pointed out that the materials the commission collected in investigations were brought forward publicly when they brought disciplinary action. The provision “use by the commissioner” applied to enforcement or disciplinary actions against a “licensee of any kind.”
Ms. Giunchigliani asked the purpose of the deletion and the new language in Subsection 6. Mr. Aimar explained that the initial language seemed to duplicate the language adopted from the NAIC Model Act on holding companies. That language was provided “as a result of the increasing ability to look to banks, holding companies, and affiliates.” Its purpose was to ensure that information given to the division in confidence from other governmental agencies or states, as well as information provided to them in their “regulatory function” from insurance companies or its affiliates under confidentiality, remained confidential. Investigative materials were confidential under current law; the new language expanded it. Originally, added Mr. Aimar, the language was to go into NRS 692C.420, as Ms. Molasky-Arman testified earlier, which was the division’s request to add that back in and not repeal that section.
Ms. Giunchigliani felt the deleted lines of subsection 6 had “set public policy” and allowed for the release of information under certain circumstances and after the investigation.
Vice Chairwoman Buckley asked if the NAIC also provided the language on page 17, line 47, “The commissioner may classify as confidential,” and that on page 18, line 13, “Any other record he deems to be confidential.” Ms. Buckley remarked the language “was not much of a standard.”
Mr. Sharp felt that only subsection 9 contained language required by GLBA. He claimed existing law already provided that confidential information, received by the Insurance Commissioner in the course of an investigation, was confidential; they did not need a new law to say it was confidential.
Vice Chairwoman Buckley asked Mr. Sharp if he had comments on the language contained on page 18, lines 17 through 20, “The commissioner shall classify as confidential consumers’ complaints and consumers’ records containing medical or other personal information.”
Mr. Sharp said that if he were to go to the Insurance Commissioner’s office to get a consumer complaint, the medical records would not be available for his inspection. He agreed that was appropriate and felt it did not need to be addressed by the proposed legislation. He was concerned, however, with the terminology “other personal information” and what that might include. He submitted that if it was their intent to protect the same information that GLBA protected, that Section 135 already did so. He also felt no need of subsection 6.
Ms. Molasky-Arman informed the committee that Section 135 referred to personal information. She clarified that personal information was not “generally defined as including medical or health information.” Personal information was financial information, such as social security numbers and bank account numbers, as well as all areas of personal life, that under the GLBA were considered to be protected information.
Ms. Molasky-Arman affirmed Mr. Sharp’s assertion that current law protected all medical and health information, and provided that the Insurance Division did not disclose such information. Ms. Molasky-Arman recognized they had a duty to protect consumers’ privacy. She related the incidence in which a ”threatening” individual demanded insurance records and complaints of approximately 300 persons, with the intent to harass them. She chose not to disclose the records and related the dangers of releasing such information. Ms. Molasky-Arman stressed that under A.B. 618 the consumer had the right to include their information in a public record.
Ms. Buckley suggested that if someone was conducting a practice that affected “hundreds,” most of them would want to be notified so that together they could prevent the practice. Ms. Molasky-Arman responded that A.B. 618 addressed her concern and that the Insurance Division did collect such information. Such accumulation of information was used to identify insurance companies to be examined. She added that the National Association of Insurance Commissioners had a confidential database containing all consumer complaints nationwide. She declared that information was, and would continue to be under A.B. 618, public.
Mr. Sharp divulged he had not seen much personal information when reviewing consumer complaints. He also noted consumers wanted to be of assistance when approached for information. Mr. Sharp emphasized the importance of the public being able to hold their insurance companies accountable.
Bob Feldman, representing Nevada General Insurance Company and Auto Insurance America, proposed an amendment to A.B. 618 (Exhibit Q). Section 58, 1(b) gave the commissioner the authority to propose regulations on the electronic storage of records. Section 58, 1(b) addressed electronic filing “filed with the division.” Mr. Feldman’s amendment would delete “filed with the division” so that the records within the industry would be maintained as well as those within the division.
Mr. Feldman proposed a second amendment that would add subsection 8 to Section 85 (Exhibit Q). Subsection 8 would exempt “salaried employees of resident producers performing any functions in the office and under the supervision of the employer and receiving no commissions” from requiring a license. He felt employees, under the supervision of a licensee, should not themselves be required to obtain a license to perform their duties. Mr. Feldman reasoned that licensed agents were responsible for the actions of their employees.
Annie Rees, President, Nevada Bail Agents Association, proposed an amendment to NRS 697.300, Section 1(a), which addressed rates charged by bail agents (Exhibit R). She noted the current rates were established in 1997 and also revealed that “bait and switch” tactics were used whereby people were quoted fees of 10 percent and charged 15 percent. The amendment provided that “the rate must be 15 percent of the bond or 75 dollars, whichever is greater; except for bonds transacted in other states which would be at that state’s rate.” Ms. Rees also offered their support for the portions of A.B. 618 that affected them as well as the increase in fees.
Vice Chairwoman Buckley provided there might not be enough time to change the sections as requested by Ms. Rees, because they were new changes of which the public was unaware. However, the committee would consider the proposed amendment.
Robert Barengo, Legislative Advocate, Western Thrift and Loan, referred to page 26, line 38. He informed the committee that the Insurance Commissioner included Western Thrift and Loan in the list of investments that insureds could make. He pointed out that NRS 677.247 covered private insurers for thrift companies, and proposed adding that statute to Section 71.
Ms. Molasky-Arman introduced Debbie Turner, Licensing Supervisor, as one who worked very closely with the National Association of Insurance Commissioners in the developing of the Producer Model Act.
Ms. Molasky-Arman addressed the amendments proposed by Bob Feldman. She felt the concerns of his first proposed amendment, which deleted “filed with the division” from Section 58, subsection 1(b) were already addressed in Section 58, subsection 1(a), which applied to all records maintained in transactions related to insurance. Ms. Molasky-Arman also felt the Commissioner already had the authority to determine what records had to be maintained permanently. Section 58, subsection 1(b) was designed specifically to address their exchange of information and records maintenance in relation to the NAIC programs. The provisions enabled the Insurance Commission to accept and maintain applications and other paperwork electronically.
Ms. Molasky-Arman disagreed with Mr. Feldman’s proposal to add subsection 8 to Section 85 by which “salaried employees of resident producers performing any functions in the office and under the supervision of the employer and receiving no commissions” would not require licensing. She prefaced her remarks by differentiating the National Association of Insurance Commissioners (NAIC) from the National Council of Insurance Legislators (NCOIL). She revealed that the NAIC’s privacy model regulation in response to GLBA did not agree with NCOIL’s model regulation, and neither superseded the other. The federal agencies selected NAIC to decide which states would comply with GLBA in the prevention of NARAB. Ms. Molasky-Arman reminded the committee that A.B. 618 was “identical in most respects” to the Model Producer Licensing Act.
Section 85, subsection 7, already exempted employees who served only existing policyholders from licensing requirements. The proposed subsection 8 was “broader” than the NAIC standards. Ms. Molasky-Arman emphasized the proposal submitted by the Insurance Division had “passed the mustard” with the NAIC and projected that the addition of subsection 8 would hinder Nevada’s reciprocity; it would be deemed that Nevada “did not provide as strongly for the expertise and the qualifications of producers as other states.”
Chairman Dini appointed a subcommittee to work on A.B. 618 Friday; it would go to work session the following Monday. The subcommittee consisted of Assemblyman Humke, Vice Chairwoman Buckley and Chairman Dini.
Other testimony provided for the record only were an amendment submitted by Crystal McGee, Committee Policy Analyst, on behalf of the Nevada Insurance Guaranty Association (Exhibit S) and a letter in support of A.B. 618 submitted by Samuel Sorich, Vice President, National Association of Independent Insurers (Exhibit T).
Chairman Dini adjourned the hearing at 6:38 p.m.
RESPECTFULLY SUBMITTED:
Darlene Nevin
Committee Secretary
APPROVED BY:
Assemblyman Joe Dini, Jr., Chairman
DATE: