(REPRINTED WITH ADOPTED AMENDMENTS)

 

Senate Bill No. 4–Senator Townsend

 

Prefiled January 11, 2001

 

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes regarding insurance. (BDR 57‑734)

 

FISCAL NOTE:            Effect on Local Government: No.

                                    Effect on the State: No.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to insurance; revising the provisions governing the filing and approval of rates of insurers in a competitive market; authorizing the commissioner to require certain insurers to file additional supporting data; providing for the issuance by the commissioner of orders to discontinue a rate; 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. NRS 686B.070 is hereby amended to read as follows:

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

1-3  organization licensed under NRS 686B.130 which has been designated by

1-4  any insurer for the filing of rates under subsection 2 of NRS 686B.090

1-5  shall file with the commissioner all:

1-6    [1.] (a) Rates and proposed increases thereto;

1-7    [2.] (b) Forms of policies to which the rates apply;

1-8    [3.] (c) Supplementary rate information; and

1-9    [4.] (d) Changes and amendments thereof,

1-10  made by it for use in this state.

1-11    2.  Except as otherwise provided in this section and NRS 686B.110:

1-12    (a) Unless the commissioner has determined that the market is not

1-13  competitive; or

1-14    (b) If a proposed increase or decrease in the rate of an insurer does

1-15  not change by more than 7 percent the total average premium required to

1-16  be paid by persons insured by the insurer for a particular line or kind of

1-17  insurance during the 12 months immediately preceding the proposed

1-18  increase or decrease,

2-1  the insurer shall file the information required by subsection 1 and the

2-2  supporting data required to be filed pursuant to NRS 686B.100 on or

2-3  before the date on which the changes are to become effective.

2-4    3.  In a competitive market, if the commissioner determines that the

2-5  rates of an insurer require closer supervision by the commissioner

2-6  because of the financial condition of the insurer or because the insurer

2-7  has engaged in rating practices which are unfairly discriminatory, the

2-8  commissioner may require the insurer to file the information required by

2-9  subsection 1 and the supporting data required to be filed pursuant to

2-10  NRS 686B.100 at least 60 days before the rates become effective or may

2-11  subject the rates to review pursuant to NRS 686B.110.

2-12    4.  The commissioner shall review filings made pursuant to this

2-13  section as soon as practicable to:

2-14    (a) Ensure the sufficiency of the financial condition of the insurer;

2-15  and

2-16    (b) Determine if the insurer has engaged in rating practices which are

2-17  unfairly discriminatory.

2-18    5.  Rates for title insurance, surety insurance and liability insurance

2-19  for medical malpractice must be approved before the insurer may use the

2-20  rates. If the commissioner does not approve or disapprove a filing

2-21  involving the rates for such insurance within 60 days after the date of the

2-22  filing, the rates shall be deemed to be approved.

2-23    Sec. 2.  NRS 686B.110 is hereby amended to read as follows:

2-24    686B.110  1.  [The] If the commissioner has determined that:

2-25    (a) The market is not competitive;

2-26    (b) Pursuant to NRS 686B.180, essential insurance coverage is not

2-27  readily available in a voluntary market;

2-28    (c) Pursuant to NRS 686B.070, the rates of the insurer require closer

2-29  supervision and that the rates are subject to review pursuant to this

2-30  section; or

2-31    (d) A proposed increase or decrease in the rate of any kind or line of

2-32  insurance changes by more than 7 percent the total average premium

2-33  required to be paid by persons insured by the insurer for a particular line

2-34  or kind of insurance during the 12 months immediately preceding the

2-35  proposed increase or decrease,

2-36  the commissioner shall consider each proposed increase or decrease in the

2-37  rate of any kind or line of insurance or subdivision thereof filed with him

2-38  pursuant to NRS 686B.070. If the commissioner finds that a proposed

2-39  increase will result in a rate which is not in compliance with NRS

2-40  686B.050, he shall disapprove the proposal. The commissioner shall

2-41  approve or disapprove each proposal [no] not later than 60 days after it is

2-42  determined by him to be complete pursuant to subsection 4. If the

2-43  commissioner fails to approve or disapprove the proposal within that

2-44  period, the proposal shall be deemed approved.

2-45    2.  Whenever an insurer has no legally effective rates as a result of the

2-46  commissioner’s disapproval of rates or other act, the commissioner shall on

2-47  request specify interim rates for the insurer that are high enough to protect

2-48  the interests of all parties and may order that a specified portion of the

2-49  premiums be placed in an escrow account approved by him. When new

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

3-2  [funds] money or any overcharge in the interim rates to be distributed

3-3  appropriately, except that refunds to policyholders that are de minimis

3-4  must not be required.

3-5    3.  If the commissioner disapproves a proposed rate and an insurer

3-6  requests a hearing to determine the validity of his action, the insurer has the

3-7  burden of showing compliance with the applicable standards for rates

3-8  established in NRS 686B.010 to 686B.1799, inclusive. Any such hearing

3-9  must be held:

3-10    (a) Within 30 days after the request for a hearing has been submitted to

3-11  the commissioner; or

3-12    (b) Within a period agreed upon by the insurer and the

3-13  commissioner.

3-14  If the hearing is not held within the period specified in paragraph (a) or (b),

3-15  or if the commissioner fails to issue an order concerning the proposed rate

3-16  for which the hearing is held within 45 days after the hearing, the proposed

3-17  rate shall be deemed approved.

3-18    4.  The commissioner shall by regulation specify the documents or any

3-19  other information which must be included in a proposal to increase or

3-20  decrease a rate submitted to him pursuant to [subsection 1.] NRS

3-21  686B.070. Each such proposal shall be deemed complete upon its filing

3-22  with the commissioner, unless the commissioner, within 15 business days

3-23  after the proposal is filed with him, determines that the proposal is

3-24  incomplete because the proposal does not comply with the regulations

3-25  adopted by him pursuant to this subsection.

3-26    5.  If the commissioner finds that a rate no longer meets the

3-27  requirements of this chapter, the commissioner may order the

3-28  discontinuance of the rate. An order for the discontinuance of a rate may

3-29  be issued only after a hearing with at least 10 days’ notice for all insurers

3-30  and rate organizations that would be affected by such an order. The

3-31  order must be in writing and include, without limitation:

3-32    (a) The grounds pursuant to which the order was issued;

3-33    (b) The date on which the order to discontinue the rate becomes

3-34  effective; and

3-35    (c) The date, within a reasonable time after the date on which the

3-36  order becomes effective, on which the order will expire.

3-37  An order for the discontinuance of a rate does not affect any contract or

3-38  policy made or issued before the date on which the order becomes

3-39  effective.

 

3-40  H