REQUIRES TWO-THIRDS MAJORITY VOTE (§§ 7, 8, 26, 32, 39,                                                                           exempt

39.5, 64, 65, 74)

                     (Reprinted with amendments adopted on April 21, 2003)

 

Assembly Bill No. 453–Committee on
Commerce and Labor

 

(On Behalf of the Department of Business
and Industry, Insurance Division)

 

March 24, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes to provisions relating to insurance. (BDR 57‑546)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: Yes.

 

~

 

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

 

AN ACT relating to insurance; expanding the authority of the Commissioner of Insurance to enter into cooperative agreements and to share certain information; revising the requirements for a person to act as a broker for reinsurance; authorizing an insurance consultant to qualify for a license in certain lines of authority; increasing the amount of surplus required to accept surplus lines; requiring an essential insurance association to qualify as a domestic mutual insurer if requested to do so by the Commissioner; clarifying that underinsured vehicle coverage includes coverage for certain damages to the extent those damages exceed a limitation of liability for a governmental agency; revising the amount of money that the Nevada Insurance Guaranty Association and the Nevada Life and Health Insurance Guaranty Association are obligated to pay for a covered claim; requiring an insurer that issues a policy of insurance covering the liability of certain physicians to submit a report to the Commissioner within a certain period after closing a claim under the policy; revising the order of distribution of certain claims from the estate of an insurer on

liquidation of the insurer; prohibiting a bail agent from acting as an attorney-in-fact for an insurer on an undertaking unless the bail agent registers in the office of the sheriff and with the clerk of the district court in which the bail agent resides; requiring a member of an association of self-insured public or private employers to include certain information in a notice of intent to withdraw from the association; providing penalties; 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 679B of NRS is hereby amended by adding

1-2  thereto a new section to read as follows:

1-3  1.  In addition to the authority conferred upon him pursuant

1-4  to NRS 679B.120, the Commissioner may:

1-5  (a) Enter into and comply with any cooperative or

1-6  coordination agreement with any governmental entity within or

1-7  outside this state relating to the regulation and administration of

1-8  insurance and persons who are materially involved in the business

1-9  of insurance;

1-10      (b) Share any document, material or other information,

1-11  including any document, material or information that is

1-12  confidential or privileged, with any state, federal or international

1-13  regulatory, law enforcement or legislative agency, and the

1-14  National Association of Insurance Commissioners and any of its

1-15  affiliates or subsidiaries, if the recipient of the document, material

1-16  or other information agrees:

1-17          (1) To ensure that the document, material or other

1-18  information remains confidential and privileged; and

1-19          (2) To submit to the jurisdiction of the courts of this state if

1-20  the recipient violates a provision of subparagraph (1); and

1-21      (c) Receive any document, material or other information from

1-22  any agency, association, affiliate or subsidiary specified in

1-23  paragraph (b). The Commissioner shall ensure that any document,

1-24  material or information received pursuant to this paragraph

1-25  remains confidential if the document, material or information is

1-26  provided to the Commissioner with a notice or the understanding

1-27  that it is confidential or privileged under the laws of the

1-28  jurisdiction from which it is submitted.

1-29      2.  The sharing or receipt of any document, material or other

1-30  information by the Commissioner pursuant to this section does not

1-31  waive any applicable privilege or claim of confidentiality in the

1-32  document, material or other information.

 

2-1  Sec. 2.  NRS 679B.130 is hereby amended to read as follows:

2-2  679B.130  1.  The Commissioner may adopt reasonable

2-3  regulations [for] :

2-4  (a) For the administration of any provision of this Code, NRS

2-5  287.04335 or chapters 616A to 617, inclusive, of NRS[.] ; or

2-6  (b) As required to ensure compliance by the Commissioner

2-7  with any federal law or regulation relating to insurance.

2-8  2.  A person who willfully violates any regulation of the

2-9  Commissioner is subject to such suspension or revocation of a

2-10  certificate of authority or license, or administrative fine in lieu of

2-11  such suspension or revocation, as may be applicable under this Code

2-12  or chapter 616A, 616B, 616C, 616D or 617 of NRS for violation of

2-13  the provision to which the regulation relates. No penalty applies to

2-14  any act done or omitted in good faith in conformity with any such

2-15  regulation, notwithstanding that the regulation may, after the act or

2-16  omission, be amended, rescinded or determined by a judicial or

2-17  other authority to be invalid for any reason.

2-18      Sec. 3.  NRS 679B.144 is hereby amended to read as follows:

2-19      679B.144  1.  The Commissioner shall collect and maintain

2-20  the information provided by insurers pursuant to NRS 690B.050

2-21  regarding each closed claim for medical malpractice filed against

2-22  [physicians and surgeons] a person who is covered by a policy of

2-23  insurance for medical malpractice in this state, including, without

2-24  limitation:

2-25      (a) The cause of the loss;

2-26      (b) A description of the injury for which the claim was filed;

2-27      (c) The sex of the injured person;

2-28      (d) The names and number of defendants in each claim;

2-29      (e) The type of coverage provided;

2-30      (f) The amount of the initial, highest and last reserves of an

2-31  insurer for each claim before final resolution of the claim by

2-32  settlement or trial;

2-33      (g) The disposition of each claim;

2-34      (h) The amount of money awarded through settlement or by

2-35  verdict;

2-36      (i) The sum of money paid to each claimant and the source of

2-37  that sum; [and]

2-38      (j) Any sum of money allocated to expenses for the adjustment

2-39  of losses[.] ; and

2-40      (k) Any other information the Commissioner determines to be

2-41  necessary or appropriate.

2-42      2.  The Commissioner shall submit with his report to the

2-43  Legislature required pursuant to NRS 679B.410[,] a summary of

2-44  the information collected pursuant to this section.

3-1  3.  The Commissioner shall adopt regulations necessary to carry

3-2  out the provisions of this section.

3-3  4.  As used in this section, “policy of insurance for medical

3-4  malpractice” means a policy that provides coverage for any

3-5  medical professional liability of the insured under the policy.

3-6  Sec. 4.  NRS 679B.440 is hereby amended to read as follows:

3-7  679B.440  1.  The Commissioner may require that reports

3-8  submitted pursuant to NRS 679B.430 include, without limitation,

3-9  information regarding:

3-10      (a) Liability insurance provided to:

3-11          (1) Governmental agencies and political subdivisions of this

3-12  state, reported separately for:

3-13             (I) Cities and towns;

3-14             (II) School districts; and

3-15             (III) Other political subdivisions;

3-16          (2) Public officers;

3-17          (3) Establishments where alcoholic beverages are sold;

3-18          (4) Facilities for the care of children;

3-19          (5) Labor, fraternal or religious organizations; and

3-20          (6) Officers or directors of organizations formed pursuant to

3-21  title 7 of NRS, reported separately for nonprofit entities and entities

3-22  organized for profit;

3-23      (b) Liability insurance for:

3-24          (1) Defective products;

3-25          (2) Medical or dental malpractice [;] of:

3-26             (I)  A practitioner licensed pursuant to chapter 630,

3-27  630A, 631, 632, 633, 634, 634A, 635, 636, 637, 637A, 637B, 639 or

3-28  640 of NRS;

3-29             (II)  A hospital or other health care facility; or

3-30             (III) Any related corporate entity.

3-31          (3) Malpractice of attorneys;

3-32          (4) Malpractice of architects and engineers; and

3-33          (5) Errors and omissions by other professionally qualified

3-34  persons;

3-35      (c) Vehicle insurance, reported separately for:

3-36          (1) Private vehicles;

3-37          (2) Commercial vehicles;

3-38          (3) Liability insurance; and

3-39          (4) Insurance for property damage; [and]

3-40      (d) Workers’ compensation insurance[.] ; and

3-41      (e) In addition to any information provided pursuant to

3-42  subparagraph (2) of paragraph (b) or NRS 690B.050, a policy of

3-43  insurance for medical malpractice. As used in this paragraph,

3-44  “policy of insurance for medical malpractice” has the meaning

3-45  ascribed to it in NRS 679B.144.

4-1  2.  The Commissioner may require that the report include,

4-2  without limitation, information specifically pertaining to this state or

4-3  to an insurer in its entirety, in the aggregate or by type of insurance,

4-4  and for a previous or current year, regarding:

4-5  (a) Premiums directly written;

4-6  (b) Premiums directly earned;

4-7  (c) Number of policies issued;

4-8  (d) Net investment income, using appropriate estimates when

4-9  necessary;

4-10      (e) Losses paid;

4-11      (f) Losses incurred;

4-12      (g) Loss reserves, including:

4-13          (1) Losses unpaid on reported claims; and

4-14          (2) Losses unpaid on incurred but not reported claims;

4-15      (h) Number of claims, including:

4-16          (1) Claims paid; and

4-17          (2) Claims that have arisen but are unpaid;

4-18      (i) Expenses for adjustment of losses, including allocated and

4-19  unallocated losses;

4-20      (j) Net underwriting gain or loss;

4-21      (k) Net operation gain or loss, including net investment income;

4-22  and

4-23      (l) Any other information requested by the Commissioner.

4-24      3.  The Commissioner may also obtain, based upon an insurer

4-25  in its entirety, information regarding:

4-26      (a) Recoverable federal income tax;

4-27      (b) Net unrealized capital gain or loss; and

4-28      (c) All other expenses not included in subsection 2.

4-29      Sec. 5.  NRS 679B.460 is hereby amended to read as follows:

4-30      679B.460  1.  An insurer who willfully or repeatedly violates

4-31  or fails to comply with a provision of NRS 679B.400 to 679B.450,

4-32  inclusive, or 690B.050 or a regulation adopted pursuant to NRS

4-33  679B.430 is subject, after notice and a hearing held pursuant to NRS

4-34  679B.310 to 679B.370, inclusive, to payment of an administrative

4-35  fine of not more than $1,000 for each day of the violation or failure

4-36  to comply, up to a maximum fine of $50,000.

4-37      2.  An insurer who fails or refuses to comply with an order

4-38  issued by the Commissioner pursuant to NRS 679B.430 is subject,

4-39  after notice and a hearing held pursuant to NRS 679B.310 to

4-40  679B.370, inclusive, to suspension or revocation of his certificate of

4-41  authority to transact insurance in this state.

4-42      3.  The imposition of an administrative fine pursuant to this

4-43  section must not be considered by the Commissioner in any other

4-44  administrative proceeding unless the fine has been paid or a court

4-45  order for payment of the fine has become final.

5-1  Sec. 6.  NRS 680A.270 is hereby amended to read as follows:

5-2  680A.270  1.  Each authorized insurer shall annually on or

5-3  before March 1, or within any reasonable extension of time therefor

5-4  which the Commissioner for good cause may have granted on or

5-5  before that date, file with the Commissioner a full and true

5-6  statement of its financial condition, transactions and affairs as of

5-7  December 31 preceding. The statement must be [in] :

5-8  (a) In the general form and context of, and require information

5-9  as called for by, [the form of] an annual statement as is currently in

5-10  general and customary use in the United States for the type of

5-11  insurer and kinds of insurance to be reported upon, with any useful

5-12  or necessary modification or adaptation thereof, supplemented by

5-13  additional information required by the Commissioner[. The

5-14  statement must be verified] ;

5-15      (b) Prepared in accordance with:

5-16          (1) The Annual Statement Instructions for the type of

5-17  insurer to be reported on as adopted by the National Association

5-18  of Insurance Commissioners for the year in which the insurer files

5-19  the statement; and

5-20          (2) The Accounting Practices and Procedures Manual

5-21  adopted by the National Association of Insurance Commissioners

5-22  and effective on January 1, 2001, and as amended by the National

5-23  Association of Insurance Commissioners after that date; and

5-24      (c) Verified by the oath of the insurer’s president or vice

5-25  president and secretary or actuary, as applicable, or, in the absence

5-26  of the foregoing, by two other principal officers, or if a reciprocal

5-27  insurer, by the oath of the attorney-in-fact, or its like officers if a

5-28  corporation.

5-29      2.  The statement of an alien insurer must be verified by its

5-30  United States manager or other officer [duly authorized,] who is

5-31  authorized to do so, and may relate only to the insurer’s transactions

5-32  and affairs in the United States unless the Commissioner requires

5-33  otherwise. If the Commissioner requires a statement as to [such an]

5-34  the insurer’s affairs throughout the world, the insurer shall file the

5-35  statement with the Commissioner as soon as reasonably possible.

5-36      3.  The Commissioner may refuse to continue, or may suspend

5-37  or revoke, the certificate of authority of any insurer failing to file its

5-38  annual statement when due.

5-39      4.  At the time of filing, the insurer shall pay the fee for filing

5-40  its annual statement as prescribed by NRS 680B.010.

5-41      5.  The Commissioner may adopt regulations requiring each

5-42  domestic, foreign and alien insurer which is authorized to transact

5-43  insurance in this state to file the insurer’s annual statement with the

5-44  National Association of Insurance Commissioners or its successor

5-45  organization.

6-1  6.  All ratios of financial analyses and synopses of examinations

6-2  concerning insurers that are submitted to the Division by the

6-3  National Association of Insurance Commissioners’ Insurance

6-4  Regulatory Information System are confidential and may not be

6-5  disclosed by the Division.

6-6  Sec. 7.  NRS 680B.010 is hereby amended to read as follows:

6-7  680B.010  The Commissioner shall collect in advance and

6-8  receipt for, and persons so served must pay to the Commissioner,

6-9  fees and miscellaneous charges as follows:

6-10      1.  Insurer’s certificate of authority:

6-11      (a) Filing initial application.............. $2,450

6-12      (b) Issuance of certificate:

6-13          (1) For any one kind of insurance as defined in NRS

6-14  681A.010 to 681A.080, inclusive............. 283

6-15          (2) For two or more kinds of insurance as so defined    578

6-16          (3) For a reinsurer........................... 2,450

6-17      (c) Each annual continuation of a certificate.. 2,450

6-18      (d) Reinstatement pursuant to NRS 680A.180, 50

6-19  percent of the annual continuation fee otherwise required.

6-20      (e) Registration of additional title pursuant to NRS

6-21  680A.240...................................................... 50

6-22      (f) Annual renewal of the registration of additional title

6-23  pursuant to NRS 680A.240......................... 25

6-24      2.  Charter documents, other than those filed with an

6-25  application for a certificate of authority. Filing amendments

6-26  to articles of incorporation, charter, bylaws, power of

6-27  attorney and other constituent documents of the insurer,

6-28  each document............................................ $10

6-29      3.  Annual statement or report. For filing annual

6-30  statement or report...................................... $25

6-31      4.  Service of process:

6-32      (a) Filing of power of attorney................. $5

6-33      (b) Acceptance of service of process........ 30

6-34      5.  Licenses, appointments and renewals for producers

6-35  of insurance:

6-36      (a) Application and license................... $125

6-37      (b) Appointment fee for each insurer....... 15

6-38      (c) Triennial renewal of each license..... 125

6-39      (d) Temporary license............................... 10

6-40      (e) Modification of an existing license.... 50

6-41      6.  Surplus lines brokers:

6-42      (a) Application and license ................. $ 125

6-43      (b) Triennial renewal of each license..... 125

6-44      7.  Managing general agents’ licenses, appointments

6-45  and renewals:

7-1  (a) Application and license....................... $125

7-2  (b) Appointment fee for each insurer........... 15

7-3  (c) Triennial renewal of each license......... 125

7-4  8.  Adjusters’ licenses and renewals:

7-5  (a) Independent and public adjusters:

7-6       (1) Application and license ................. $125

7-7       (2) Triennial renewal of each license..... 125

7-8  (b) Associate adjusters:

7-9       (1) Application and license .................... 125

7-10          (2) Triennial renewal of each license. 125

7-11      9.  Licenses and renewals for appraisers of physical

7-12  damage to motor vehicles:

7-13      (a) Application and license .................. $125

7-14      (b) Triennial renewal of each license..... 125

7-15      10.  Additional title and property insurers pursuant to

7-16  NRS 680A.240:

7-17      (a) Original registration.......................... $50

7-18      (b) Annual renewal.................................... 25

7-19      11.  Insurance vending machines:

7-20      (a) Application and license, for each machine  $125

7-21      (b) Triennial renewal of each license..... 125

7-22      12.  Permit for solicitation for securities:

7-23      (a) Application for permit.................... $100

7-24      (b) Extension of permit............................. 50

7-25      13.  Securities salesmen for domestic insurers:

7-26      (a) Application and license .................... $25

7-27      (b) Annual renewal of license................... 15

7-28      14.  Rating organizations:

7-29      (a) Application and license .................. $500

7-30      (b) Annual renewal................................. 500

7-31      15.  Certificates and renewals for administrators

7-32  licensed pursuant to chapter 683A of NRS:

7-33      (a) Application and certificate of registration $125

7-34      (b) Triennial renewal.............................. 125

7-35      16.  For copies of the insurance laws of Nevada, a fee

7-36  which is not less than the cost of producing the copies.

7-37      17.  Certified copies of certificates of authority and

7-38  licenses issued pursuant to the Insurance Code   $10

7-39      18.  For copies and amendments of documents on file

7-40  in the Division, a reasonable charge fixed by the

7-41  Commissioner, including charges for duplicating or

7-42  amending the forms and for certifying the copies and

7-43  affixing the official seal.

8-1  19.  Letter of clearance for a producer of insurance or

8-2  other licensee[,] if requested by someone other than the

8-3  licensee......................................................... $10

8-4  20.  Certificate of status as a producer of insurance or

8-5  other licensee[,] if requested by someone other than the

8-6  licensee......................................................... $10

8-7  21.  Licenses, appointments and renewals for bail

8-8  agents:

8-9  (a) Application and license ...................... $125

8-10      (b) Appointment for each surety insurer.. 15

8-11      (c) Triennial renewal of each license..... 125

8-12      22.  Licenses and renewals for bail enforcement agents:

8-13      (a) Application and license .................. $125

8-14      (b) Triennial renewal of each license..... 125

8-15      23.  Licenses, appointments and renewals for general

8-16  agents for bail:

8-17      (a) Application and license .................. $125

8-18      (b) Initial appointment by each insurer.... 15

8-19      (c) Triennial renewal of each license..... 125

8-20      24.  Licenses and renewals for bail solicitors:

8-21      (a) Application and license................... $125

8-22      (b) Triennial renewal of each license..... 125

8-23      25.  Licenses and renewals for title agents and escrow

8-24  officers:

8-25      (a) Application and license .................. $125

8-26      (b) Triennial renewal of each license..... 125

8-27      (c) Appointment fee for each title insurer15

8-28      (d) Change in name or location of business or in

8-29  association..................................................... 10

8-30      26.  Certificate of authority and renewal for a seller of

8-31  prepaid funeral contracts.......................... $125

8-32      27.  Licenses and renewals for agents for prepaid

8-33  funeral contracts:

8-34      (a) Application and license .................. $125

8-35      (b) Triennial renewal of each license..... 125

8-36      28.  Licenses, appointments and renewals for agents for

8-37  fraternal benefit societies:

8-38      (a) Application and license .................. $125

8-39      (b) Appointment for each insurer............. 15

8-40      (c) Triennial renewal of each license..... 125

8-41      29.  Reinsurance intermediary broker or manager:

8-42      (a) Application and license................... $125

8-43      (b) Triennial renewal of each license..... 125

8-44      30.  Agents for and sellers of prepaid burial contracts:

8-45      (a) Application and certificate or license$125

9-1  (b) Triennial renewal................................ $125

9-2  31.  Risk retention groups:

9-3  (a) Initial registration and review of an application$2,450

9-4  (b) Each annual continuation of a certificate of

9-5  registration................................................ 2,450

9-6  32.  Required filing of forms:

9-7  (a) For rates and policies............................ $25

9-8  (b) For riders and endorsements................... 10

9-9  33.  Viatical settlements:

9-10      (a) Provider of viatical settlements:

9-11          (1) Application and license........... $1,000

9-12          (2) Annual renewal.......................... 1,000

9-13      (b) Broker of viatical settlements:

9-14          (1) Application and license................. 500

9-15          (2) Annual renewal............................. 500

9-16      34.  Insurance consultants:

9-17      (a) Application and license................... $125

9-18      (b) Triennial renewal.............................. 125

9-19      35.  Licensee’s association with or appointment or

9-20  sponsorship by an organization:

9-21      (a) Initial appointment, association or sponsorship, for

9-22  each organization........................................ $50

9-23      (b) Renewal of each association or sponsorship  50

9-24      (c) Annual renewal of appointment.......... 15

9-25      36.  Purchasing groups:

9-26      (a) Initial registration and review of an application  $100

9-27      (b) Each annual continuation of registration  100

9-28      Sec. 8.  NRS 680B.070 is hereby amended to read as follows:

9-29      680B.070  1.  Each authorized insurer, fraternal benefit

9-30  society, health maintenance organization, organization for dental

9-31  care , prepaid limited health service organization and motor club

9-32  shall on or before March 1 of each year pay to the Commissioner

9-33  [the] a reasonable uniform amount, not to exceed [$15,] $30, as the

9-34  Commissioner requires, to cover the assessment levied upon this

9-35  state in the same calendar year by the National Association of

9-36  Insurance Commissioners to defray:

9-37      (a) The general expenses of the Association; and

9-38      (b) Reasonable and necessary travel and related expenses

9-39  incurred by the Commissioner and members of his staff, without

9-40  limitation as to number, in attending meetings of the Association

9-41  and its committees, subcommittees, hearings and other official

9-42  activities.

9-43  The Commissioner shall give written notice of the required amount.

9-44      2.  Expenses incurred for the purposes described in paragraphs

9-45  (a) and (b) of subsection 1 must be paid in full and are not subject to

10-1  the limitations expressed in NRS 281.160 or in the regulations of

10-2  any state agency.

10-3      3.  All money received by the Commissioner pursuant to

10-4  subsection 1 must be deposited in the State Treasury for credit to the

10-5  National Association Account of the Division of Insurance, which is

10-6  hereby created in the State General Fund. Except as otherwise

10-7  provided in subsection 2, all claims against the Account must be

10-8  paid as other claims against the State are paid.

10-9      Sec. 9.  NRS 681A.160 is hereby amended to read as follows:

10-10     681A.160  1.  Except as otherwise provided in subsection 2,

10-11  credit must be allowed if reinsurance is ceded to an assuming

10-12  insurer which is accredited as a reinsurer in this state. An accredited

10-13  reinsurer is one which:

10-14     (a) Files with the Commissioner an executed form approved by

10-15  the Commissioner as evidence of its submission to this state’s

10-16  jurisdiction;

10-17     (b) Submits to this state’s authority to examine its books and

10-18  records;

10-19     (c) [Is] Files with the Commissioner a certified copy of a

10-20  certificate of authority or other evidence approved by the

10-21  Commissioner indicating that it is licensed to transact insurance or

10-22  reinsurance in at least one state, or in the case of a branch in the

10-23  United States of an alien assuming insurer is entered through and

10-24  licensed to transact insurance or reinsurance in at least one state;

10-25     (d) Files annually with the Commissioner a copy of its annual

10-26  statement filed with the Division of its state of domicile or entry and

10-27  a copy of its most recent audited financial statement; and

10-28     (e) Maintains a surplus as regards policyholders in an amount

10-29  which is not less than $20,000,000 and whose accreditation:

10-30         (1) Has not been denied by the Commissioner within 90 days

10-31  after its submission; or

10-32         (2) Has been approved by the Commissioner.

10-33     2.  No credit may be allowed for a domestic ceding insurer if

10-34  the assuming insurer’s accreditation has been revoked by the

10-35  Commissioner after notice and a hearing.

10-36     Sec. 10.  NRS 681A.180 is hereby amended to read as follows:

10-37     681A.180  1.  [Credit] Except as otherwise provided in

10-38  subsection 4, credit must be allowed if reinsurance is ceded to an

10-39  assuming insurer which maintains a trust fund in a qualified

10-40  financial institution in the United States for the payment of the valid

10-41  claims of its policyholders and ceding insurers in the United States,

10-42  their assigns and successors in interest. The assuming insurer shall

10-43  report annually to the Commissioner information substantially the

10-44  same as that required to be reported on the National Association of

10-45  Insurance Commissioners’ form of annual statement by licensed

11-1  insurers to enable the Commissioner to determine the sufficiency of

11-2  the trust fund.

11-3      2.  In the case of a single assuming insurer, the trust must

11-4  consist of an account in trust equal to the assuming insurer’s

11-5  liabilities attributable to business written in the United States and

11-6  the assuming insurer shall maintain a surplus in trust of not less than

11-7  $20,000,000.

11-8      3.  In the case of a group of incorporated and individual

11-9  unincorporated underwriters, the trust must consist of an account in

11-10  trust equal to the group’s liabilities attributable to business written

11-11  in the United States and the group shall maintain a surplus in trust of

11-12  which $100,000,000 must be held jointly for the benefit of ceding

11-13  insurers in the United States to any member of the group, and the

11-14  group shall make available to the Commissioner an annual

11-15  certification of the solvency of each underwriter by the group’s

11-16  domiciliary regulator and its independent public accountants.

11-17     4.  If the assuming insurer does not meet the requirements of

11-18  NRS 681A.110, 681A.160 or 681A.170, credit must not be allowed

11-19  unless the assuming insurer has agreed to the following

11-20  conditions set forth in the trust agreement:

11-21     (a) Notwithstanding any provision to the contrary in the trust

11-22  instrument, if the trust fund consists of an amount that is less than

11-23  the amount required pursuant to this section, or if the grantor of

11-24  the trust fund is declared to be insolvent or placed into

11-25  receivership, rehabilitation, liquidation or a similar proceeding in

11-26  accordance with the laws of the grantor’s state or country of

11-27  domicile, the trustee of the trust fund must comply with an order

11-28  of the commissioner of insurance or other appropriate person with

11-29  regulatory authority over the trust fund in that state or country or

11-30  a court of competent jurisdiction requiring the trustee to transfer

11-31  to that commissioner or person all the assets of the trust fund;

11-32     (b) The assets of the trust fund must be distributed by and

11-33  claims filed with and valued by the commissioner of insurance or

11-34  other appropriate person with regulatory authority over the trust

11-35  fund in accordance with the laws of the state in which the trust

11-36  fund is domiciled that are applicable to the liquidation of domestic

11-37  insurers in that state;

11-38     (c) If the commissioner of insurance or other appropriate

11-39  person with regulatory authority over the trust fund determines

11-40  that the assets of the trust fund or any portion of the trust fund are

11-41  not required to satisfy any claim of any ceding insurer of the

11-42  grantor of the trust fund in the United States, the assets must be

11-43  returned by that commissioner or person to the trustee of the trust

11-44  fund for distribution in accordance with the trust agreement; and

11-45     (d) The grantor of the trust must waive any right that:

12-1          (1) Is otherwise available to him under the laws of the

12-2  United States; and

12-3          (2) Is inconsistent with the provisions of this subsection.

12-4      Sec. 11.  NRS 681A.190 is hereby amended to read as follows:

12-5      681A.190  1.  Credit must be allowed if reinsurance is ceded

12-6  to a group of incorporated insurers under common administration

12-7  which:

12-8      (a) Does not engage in any business other than underwriting

12-9  as a member of the group;

12-10     (b) Is subject to the same amount of regulation and solvency

12-11  control by the group’s domiciliary regulator as are the

12-12  unincorporated members of the group;

12-13     (c) Reports annually to the Commissioner the information

12-14  required by subsection 1 of NRS 681A.180;

12-15     [(b)] (d) Has continuously transacted insurance outside the

12-16  United States for at least 3 years immediately before making an

12-17  application for accreditation;

12-18     [(c)] (e) Submits to this state’s authority to examine its books

12-19  and records and bears the expense of the examination;

12-20     [(d)] (f) Has aggregate policyholders’ surplus of

12-21  $10,000,000,000; and

12-22     [(e)] (g) Maintains a trust pursuant to subsection 2.

12-23     2.  The trust must be in an amount equal to the group’s several

12-24  liabilities attributable to business ceded by ceding insurers in the

12-25  United States to any member of the group pursuant to contracts of

12-26  reinsurance issued in the name of the group, and the group shall

12-27  maintain a joint surplus in trust of which $100,000,000 must be held

12-28  jointly for the benefit of ceding insurers in the United States to any

12-29  member of the group as additional security for any such liabilities.

12-30     3.  Each member of the group shall , within 90 days after the

12-31  date its financial statements must be filed with the group’s

12-32  domiciliary regulator, make available to the Commissioner an

12-33  annual certification of the member’s solvency by the member’s

12-34  domiciliary regulator and its independent public accountant.

12-35     Sec. 12.  NRS 681A.200 is hereby amended to read as follows:

12-36     681A.200  1.  A trust for the purposes of NRS 681A.180 or

12-37  681A.190 , and any amendment to the trust, must be established or

12-38  amended in a form approved by [the Commissioner.] :

12-39     (a) The Commissioner; and

12-40     (b) The commissioner of insurance or other appropriate

12-41  person of:

12-42         (1) The state in which the trust is domiciled; or

12-43         (2) Any other state that, pursuant to the trust instrument,

12-44  accepts regulatory authority over the trust.

13-1      2.  The form of the trust and any amendment to the trust must

13-2  be filed with the commissioner of insurance or other appropriate

13-3  person of each state in which the policyholders of the ceding

13-4  insurer who are the beneficiaries of the trust are domiciled.

13-5      3.  The trust instrument must provide that contested claims

13-6  become valid [and enforceable upon] , enforceable and payable

13-7  from money held in the trust fund to the extent that the contested

13-8  claims remain unsatisfied, within 30 days after the entry of the

13-9  final order of any court of competent jurisdiction in the United

13-10  States. The trust must vest legal title to its assets in the trustees of

13-11  the trust for its policyholders and ceding insurers in the United

13-12  States, their assigns and successors in interest. The trust and

13-13  the assuming insurer are subject to examination as determined by

13-14  the Commissioner. The trust must remain in effect for as long as the

13-15  assuming insurer or any member or former member of the group of

13-16  insurers has outstanding obligations due under the agreements for

13-17  reinsurance subject to the trust.

13-18     [2.  No]

13-19     4.  Not later than February 28 of each year the trustees of the

13-20  trust shall report to the Commissioner in writing setting forth the

13-21  balance of the trust and listing the trust’s investments at the end of

13-22  the preceding year and shall certify the date of termination of the

13-23  trust, if so planned, or certify that the trust will not expire before the

13-24  next following December 31.

13-25     Sec. 13.  NRS 681A.210 is hereby amended to read as follows:

13-26     681A.210  1.  Except as otherwise provided in subsection 2, if

13-27  the assuming insurer is not licensed or accredited to transact

13-28  insurance or reinsurance in this state, the credit permitted by NRS

13-29  681A.170 or 681A.180 must not be allowed unless the assuming

13-30  insurer agrees in the agreements for reinsurance:

13-31     (a) That in the event of the failure of the assuming insurer to

13-32  perform its obligations under the terms of the agreement, the

13-33  assuming insurer, at the request of the ceding insurer, will submit to

13-34  the jurisdiction of any court of competent jurisdiction in any state of

13-35  the United States, will comply with all requirements necessary to

13-36  give the court jurisdiction, and will abide by the final decision of the

13-37  court or of any appellate court in the event of an appeal; [and]

13-38     (b) To designate the Commissioner or a designated attorney as

13-39  its true and lawful attorney upon whom may be served any lawful

13-40  process in an action, suit or proceeding instituted by or on behalf of

13-41  the ceding company[.] ; and

13-42     (c) To comply with the conditions set forth in subsection 4 of

13-43  NRS 681A.180.

14-1      2.  This section does not conflict with or override the obligation

14-2  of the parties to an agreement for reinsurance to arbitrate their

14-3  disputes[,] if such an obligation is created in the agreement.

14-4      Sec. 14.  NRS 681A.420 is hereby amended to read as follows:

14-5      681A.420  1.  A person shall not act as a broker for

14-6  reinsurance [if he maintains an office, directly or as a member or

14-7  employee of a firm or association or as an officer, director or

14-8  employee of a corporation:

14-9      (a) In this state,] for a domestic insurer or reinsurer unless he

14-10  is [a] :

14-11     (a) A licensed producer in this state; or

14-12     (b) [In another state, unless he is a licensed producer] Licensed

14-13  as a nonresident intermediary for reinsurance in this state . [or in

14-14  another state having a law substantially similar to this title or he is

14-15  licensed in this state as a nonresident intermediary.]

14-16     2.  A person shall not act as a [manager] broker for reinsurance

14-17  [:

14-18     (a) For] for a foreign or alien insurer or reinsurer [domiciled] if

14-19  he maintains an office, directly or as a member or employee of a

14-20  firm or association or as an officer, director or employee of a

14-21  corporation in this state, unless he is [a] :

14-22     (a) A licensed producer in this state; or

14-23     (b) [In] Licensed as a nonresident intermediary for

14-24  reinsurance in this state . [, if he maintains an office individually or

14-25  as a member or employee of a firm or association or as an officer,

14-26  director or employee of a corporation in this state, unless he is a

14-27  licensed producer in this state; or

14-28     (c) In another state for a foreign insurer, unless he is a licensed

14-29  producer in this state or in another state having a law substantially

14-30  similar to this title or he is licensed in this state as a nonresident

14-31  intermediary.]

14-32     3.  A person shall not act as a manager for reinsurance [shall:]

14-33  for a domestic insurer or reinsurer unless he is:

14-34     (a) A licensed producer in this state; or

14-35     (b) Licensed as a nonresident manager for reinsurance in this

14-36  state.

14-37     4.  A person shall not act as a manager for reinsurance for

14-38  any foreign or alien insurer or reinsurer if he maintains an office,

14-39  directly or as a member or employee of a firm or association or as

14-40  an officer, director or employee of a corporation in this state,

14-41  unless he is:

14-42     (a) A licensed producer in this state; or

14-43     (b) Licensed as a nonresident manager for reinsurance in this

14-44  state.

14-45     5.  A manager for reinsurance shall:

15-1      (a) File a bond from an insurer in an amount that is acceptable to

15-2  the Commissioner for the protection of the reinsurer; and

15-3      (b) Maintain a policy covering errors and omissions in an

15-4  amount that is acceptable to the Commissioner.

15-5      Sec. 15.  NRS 681B.160 is hereby amended to read as follows:

15-6      681B.160  1.  [All] Except as otherwise provided in

15-7  subsection 5, all bonds or other evidences of debt having a fixed

15-8  term and rate of interest held by an insurer may, if amply secured

15-9  and not in default as to principal or interest, be valued as follows:

15-10     (a) If purchased at par, at the par value.

15-11     (b) If purchased above or below par, on the basis of the purchase

15-12  price adjusted so as to bring the value to par at maturity and so as to

15-13  yield in the meantime the effective rate of interest at which the

15-14  purchase was made[,] or , in lieu of [such] that method, according

15-15  to [such] an accepted method of valuation [as] that is approved by

15-16  the Commissioner.

15-17     2.  The purchase price [shall in no case] must not be taken at a

15-18  higher figure than the actual market value at the time of purchase,

15-19  plus actual brokerage, transfer, postage or express charges paid in

15-20  the acquisition of such securities.

15-21     3.  Unless otherwise provided by a valuation established or

15-22  approved by the Commissioner, [no such security shall] the security

15-23  must not be carried at above the call price for the entire issue during

15-24  any period within which the security may be so called.

15-25     4.  The Commissioner [shall have] has full discretion in

15-26  determining the method of calculating values [according to the rules

15-27  set forth in] pursuant to this section.

15-28     5.  A valuation determined pursuant to this section must not

15-29  be inconsistent with any applicable valuation or method then

15-30  currently formulated or approved by the National Association of

15-31  Insurance Commissioners or its successor organization.

15-32     Sec. 16.  NRS 681B.170 is hereby amended to read as follows:

15-33     681B.170  1.  [Securities,] Except as otherwise provided in

15-34  subsection 4, securities, other than those [referred to] specified in

15-35  NRS 681B.160, held by an insurer [shall] must be valued, in the

15-36  discretion of the Commissioner, at their market value, or at their

15-37  appraised value, or at prices determined by him as representing their

15-38  fair market value.

15-39     2.  Preferred or guaranteed stocks or shares while paying full

15-40  dividends may be carried at a fixed value in lieu of market value, at

15-41  the discretion of the Commissioner and in accordance with [such] a

15-42  method of computation [as he may approve.] approved by the

15-43  Commissioner.

15-44     3.  The stock of a subsidiary of an insurer [shall] must be

15-45  valued on the basis of the value of only [such of the] those assets of

16-1  [such] the subsidiary as would constitute lawful investments of the

16-2  insurer if acquired or held directly by the insurer.

16-3      4.  A valuation determined pursuant to this section must not

16-4  be inconsistent with any applicable valuation or method then

16-5  currently formulated or approved by the National Association of

16-6  Insurance Commissioners or its successor organization.

16-7      Sec. 17.  NRS 682A.080 is hereby amended to read as follows:

16-8      682A.080  1.  An insurer may invest any of its funds in

16-9  obligations other than those eligible for investment under NRS

16-10  682A.230 [(] , relating to real property mortgages , [),] if they are

16-11  issued, assumed or guaranteed by any solvent institution [created or

16-12  existing under the laws of the United States of America, Canada or

16-13  Mexico, or of any state, district, province or territory thereof,] and

16-14  are qualified under any of the following:

16-15     (a) Obligations which are secured by adequate collateral security

16-16  and bear fixed interest if , during each of any 3, including the last 2,

16-17  of the 5 fiscal years next preceding the date of acquisition by the

16-18  insurer, the net earnings of the issuing, assuming or guaranteeing

16-19  institution available for its fixed charges, as defined in NRS

16-20  682A.090, have been not less than 1 1/2 times the total of its fixed

16-21  charges for [such] that year. In determining the adequacy of

16-22  collateral security , not more than one-third of the total value of

16-23  [such] the required collateral may consist of stock other than stock

16-24  meeting the requirements of NRS 682A.100 [(] , relating to

16-25  preferred or guaranteed stock . [).]

16-26     (b) Fixed interest-bearing obligations, other than those described

16-27  in paragraph (a), if the net earnings of the issuing, assuming or

16-28  guaranteeing institution available for its fixed charges for a period

16-29  of 5 fiscal years next preceding the date of acquisition by the insurer

16-30  have averaged per year not less than 1 1/2 times its average annual

16-31  fixed charges applicable to [such] that period and if , during the last

16-32  year of [such period such] that period, the net earnings have been

16-33  not less than 1 1/2 times its fixed charges for [such] that year.

16-34     (c) Adjustment, income or other contingent interest obligations

16-35  if the net earnings of the issuing, assuming or guaranteeing

16-36  institution available for its fixed charges for a period of 5 fiscal

16-37  years next preceding the date of acquisition by the insurer have

16-38  averaged per year not less than 1 1/2 times the sum of its average

16-39  annual fixed charges and its average annual maximum contingent

16-40  interest applicable to such period and if , during each of the last 2

16-41  years of [such period such] that period, the net earnings have not

16-42  been less than 1 1/2 times the sum of its fixed charges and

16-43  maximum contingent interest for such year.

16-44     (d) Capital stock and other securities of:

17-1          (1) A state development corporation organized under the

17-2  provisions of chapter 670 of NRS.

17-3          (2) A corporation for economic revitalization and

17-4  diversification organized under the provisions of chapter 670A of

17-5  NRS, if the insurer is a member of the corporation, and to the extent

17-6  of its loan limit established under NRS 670A.200.

17-7      2.  No insurer may invest in any such bonds or evidences of

17-8  indebtedness in excess of 10 percent of any issue of such bonds or

17-9  evidences of indebtedness or, subject to subsection 1 of NRS

17-10  682A.050 [(diversification),] , relating to diversification, more than

17-11  an amount equal to 10 percent of the insurer’s admitted assets in any

17-12  issue.

17-13     Sec. 18.  NRS 682A.100 is hereby amended to read as follows:

17-14     682A.100  1.  An insurer may invest in preferred or

17-15  guaranteed stocks or shares of any solvent institution [existing under

17-16  the laws of the United States of America, Canada or Mexico, or of

17-17  any state or province thereof,] if all of the prior obligations and prior

17-18  preferred stocks, if any, of the institution at the date of acquisition of

17-19  the investment by the insurer are eligible as investments under this

17-20  chapter and if the net earnings of the institution available for its

17-21  fixed charges during either of the last 2 years have been, and during

17-22  each of the last 5 years have averaged, not less than 1 1/2 times the

17-23  sum of its average annual fixed charges, if any, its average annual

17-24  maximum contingent interest, if any, and its average annual

17-25  preferred dividend requirements. For the purposes of this section,

17-26  the computation refers to the fiscal years immediately preceding the

17-27  date of acquisition of the investment by the insurer, and the term

17-28  “preferred dividend requirement” means cumulative or

17-29  noncumulative dividends, whether paid or not.

17-30     2.  No insurer may invest in any such preferred or guaranteed

17-31  stocks in an amount in excess of 35 percent of the particular issue of

17-32  guaranteed or preferred stock or, subject to subsection 1 of NRS

17-33  682A.050 , more than an amount equal to 10 percent of the insurer’s

17-34  admitted assets in any one issue.

17-35     Sec. 19.  NRS 682A.110 is hereby amended to read as follows:

17-36     682A.110  1.  An insurer may invest up to 35 percent of its

17-37  assets in nonassessable common stocks, other than insurance stocks,

17-38  of any solvent corporation , [organized and existing under the laws

17-39  of the United States of America, Canada or Mexico, or of any state

17-40  or province thereof,] except that bank or trust company stocks may

17-41  be assessable and any stocks may be assessable for taxes[,] if the

17-42  corporation has had net earnings available for dividends on the stock

17-43  in each of the 5 fiscal years next preceding acquisition by the

17-44  insurer. If the issuing corporation has not been in legal existence for

17-45  all of the 5 fiscal years but was formed as a consolidation or merger

18-1  of two or more businesses of which at least one was in operation on

18-2  a date 5 years before the investment, the test of eligibility of its

18-3  common stock under this section must be based upon consolidated

18-4  pro forma statements of the predecessor or constituent institutions.

18-5      2.  Any amount invested in a fund or trust under NRS 682A.140

18-6  must not be included in computing the amounts prescribed in

18-7  subsection 1.

18-8      Sec. 20.  NRS 683A.08524 is hereby amended to read as

18-9  follows:

18-10     683A.08524  1.  Except as otherwise provided [by] in

18-11  subsection 2, the Commissioner shall issue a certificate of

18-12  registration as an administrator to an applicant who:

18-13     (a) Submits an application on a form prescribed by the

18-14  Commissioner;

18-15     (b) Has complied with the provisions of NRS 683A.08522; and

18-16     (c) Pays the fee for the issuance of a certificate of registration

18-17  prescribed in NRS 680B.010.

18-18     2.  The Commissioner may refuse to issue a certificate of

18-19  registration as an administrator to an applicant if the Commissioner

18-20  determines that the applicant or any person who has completed an

18-21  affidavit pursuant to subsection 6 of NRS 683A.08522:

18-22     (a) Is not competent to act as an administrator;

18-23     (b) Is not trustworthy or financially responsible;

18-24     (c) Does not have a good personal or business reputation;

18-25     (d) Has had a license or certificate to transact insurance denied

18-26  for cause, suspended or revoked in this state or any other state; [or]

18-27     (e) Has failed to comply with any provision of this chapter[.] ;

18-28  or

18-29     (f) Is financially unsound.

18-30     Sec. 21.  NRS 683A.08528 is hereby amended to read as

18-31  follows:

18-32     683A.08528  1.  Not later than [March] July 1 of each year,

18-33  each holder of a certificate of registration as an administrator shall

18-34  file [a financial statement] an annual report with the Commissioner

18-35  . [on a form approved by the Commissioner.] The report must be

18-36  verified by at least two officers of the administrator.

18-37     2.  Each annual report filed pursuant to subsection 1 must

18-38  include:

18-39     (a) An audited financial statement of the administrator

18-40  prepared by an independent certified public accountant;

18-41     (b) The complete name and address of each person for whom

18-42  the administrator agreed to act as an administrator during the

18-43  immediately preceding fiscal year; and

18-44     (c) Any other information required by the Commissioner.

19-1      3.  In addition to the information required pursuant to

19-2  subsection 2, if an annual report is prepared on a consolidated

19-3  basis, the report must include a columnar or combining worksheet

19-4  that:

19-5      (a) Includes the amounts shown on the consolidated audited

19-6  financial statement;

19-7      (b) Separately sets forth the amounts for each entity included

19-8  in the worksheet; and

19-9      (c) Includes an explanation of each consolidating and

19-10  eliminating entry included in the worksheet.

19-11     4.  Each administrator who files an annual report pursuant to

19-12  this section shall, at the time of filing the report, pay a filing fee in

19-13  an amount determined by the Commissioner.

19-14     5.  On or before September 1 of each year, the Commissioner

19-15  shall, for each administrator, review the annual report that is most

19-16  recently filed by the administrator. As soon as practicable after

19-17  reviewing the report, the Commissioner shall:

19-18     (a) Issue a certificate to the administrator:

19-19         (1) Indicating that, based on the annual report and the

19-20  audited financial statement included in the report, the

19-21  administrator has a positive net worth and is currently licensed

19-22  and in good standing in this state; or

19-23         (2) Setting forth any deficiency found by the Commissioner

19-24  in the annual report and accompanying financial statement; or

19-25     (b) Submit a statement to any electronic database maintained

19-26  by the National Association of Insurance Commissioners or any

19-27  affiliate or subsidiary of the Association:

19-28         (1) Indicating that, based on the annual report and the

19-29  audited financial statement included in the report, the

19-30  administrator has a positive net worth and is in compliance with

19-31  existing law; or

19-32         (2) Setting forth any deficiency found by the Commissioner

19-33  in the annual report and accompanying financial statement.

19-34     Sec. 22.  NRS 683A.0892 is hereby amended to read as

19-35  follows:

19-36     683A.0892  1.  The Commissioner:

19-37     [1.] (a) Shall suspend or revoke the certificate of registration of

19-38  an administrator if the Commissioner has determined, after notice

19-39  and a hearing, that the administrator:

19-40     [(a)] (1) Is in an unsound financial condition;

19-41     [(b)] (2) Uses methods or practices in the conduct of his

19-42  business that are hazardous or injurious to insured persons or

19-43  members of the general public; or

19-44     [(c)] (3) Has failed to pay any judgment against him in this state

19-45  within 60 days after the judgment became final.

20-1      [2.] (b) May suspend or revoke the certificate of registration of

20-2  an administrator if the Commissioner determines, after notice and a

20-3  hearing, that the administrator:

20-4      [(a)] (1) Has willfully violated or failed to comply with any

20-5  provision of this Code, any regulation adopted pursuant to this Code

20-6  or any order of the Commissioner;

20-7      [(b)] (2) Has refused to be examined by the Commissioner or

20-8  has refused to produce accounts, records or files for examination

20-9  upon the request of the Commissioner;

20-10     [(c)] (3) Has, without just cause, refused to pay claims or

20-11  perform services pursuant to his contracts or has, without just cause,

20-12  caused persons to accept less than the amount of money owed to

20-13  them pursuant to the contracts, or has caused persons to employ an

20-14  attorney or bring a civil action against him to receive full payment

20-15  or settlement of claims;

20-16     [(d)] (4) Is affiliated with, managed by or owned by another

20-17  administrator or an insurer who transacts insurance in this state

20-18  without a certificate of authority or certificate of registration;

20-19     [(e)] (5) Fails to comply with any of the requirements for a

20-20  certificate of registration;

20-21     [(f)] (6) Has been convicted of[,] or has entered a plea of guilty

20-22  or nolo contendere to a felony, whether or not adjudication was

20-23  withheld; [or

20-24     (g)] (7) Has had his authority to act as an administrator in

20-25  another state limited, suspended or revoked[.

20-26     3.  May,] ; or

20-27         (8) Has failed to file an annual report in accordance with

20-28  NRS 683A.08528.

20-29     (c) May suspend or revoke the certificate of registration of an

20-30  administrator if the Commissioner determines, after notice and a

20-31  hearing, that a responsible person:

20-32         (1) Has refused to provide any information relating to the

20-33  administrator’s affairs or refused to perform any other legal

20-34  obligation relating to an examination upon request by the

20-35  Commissioner; or

20-36         (2) Has been convicted of or has entered a plea of guilty or

20-37  nolo contendere to a felony committed on or after October 1, 2003,

20-38  whether or not adjudication was withheld.

20-39     (d) May, upon notice to the administrator, suspend the

20-40  certificate of registration of the administrator pending a hearing if:

20-41     [(a)] (1) The administrator is impaired or insolvent;

20-42     [(b)] (2) A proceeding for receivership, conservatorship or

20-43  rehabilitation has been commenced against the administrator in any

20-44  state; or

21-1      [(c)] (3) The financial condition or the business practices of the

21-2  administrator represent an imminent threat to the public health,

21-3  safety or welfare of the residents of this state.

21-4      [4.] (e) May, in addition to or in lieu of the suspension or

21-5  revocation of the certificate of registration of the administrator,

21-6  impose a fine of $2,000 for each act or violation.

21-7      2.  As used in this section, “responsible person” means any

21-8  person who is responsible for or controls or is authorized to

21-9  control or advise the affairs of an administrator, including,

21-10  without limitation:

21-11     (a) A member of the board of directors, board of trustees,

21-12  executive committee or other governing board or committee of the

21-13  administrator;

21-14     (b) The president, vice president, chief executive officer, chief

21-15  operating officer or any other principal officer of an

21-16  administrator, if the administrator is a corporation;

21-17     (c) A partner or member of the administrator, if the

21-18  administrator is a partnership, association or limited-liability

21-19  company; and

21-20     (d) Any shareholder or member of the administrator who

21-21  directly or indirectly holds 10 percent or more of the voting stock,

21-22  voting securities or voting interest of the administrator.

21-23     Sec. 23.  NRS 683A.201 is hereby amended to read as follows:

21-24     683A.201  1.  A person shall not sell, solicit or negotiate

21-25  insurance in this state for any class of insurance unless he is licensed

21-26  for that class of insurance.

21-27     2.  An insurer is exempt from the requirement for licensure as a

21-28  producer of insurance, but this exemption does not extend to an

21-29  insurer’s officers, directors, employees, subsidiaries or affiliates[.]

21-30  who sell, solicit or negotiate insurance.

21-31     3.  A person required to be licensed in this state who transacts

21-32  insurance without a license is subject to an administrative fine of not

21-33  more that $1,000 for each violation.

21-34     Sec. 24.  NRS 683A.211 is hereby amended to read as follows:

21-35     683A.211  The following persons need not be licensed as

21-36  producers of insurance:

21-37     1.  An officer, director or employee of an insurer or of a

21-38  producer of insurance if the officer, director or employee does not

21-39  receive any commission on policies written or sold to insure risks

21-40  residing, located or to be performed in this state and:

21-41     (a) The officer, director or employee’s activities are executive,

21-42  administrative, managerial[,] or clerical , or a combination [of

21-43  these,] thereof, and are only indirectly related to the sale,

21-44  solicitation or negotiation of insurance;

22-1      (b) The officer, director or employee’s function relates to

22-2  underwriting, control of losses, inspection or the processing,

22-3  adjusting, investigating or settling of claims on contracts of

22-4  insurance; or

22-5      (c) The officer, director or employee is acting in the capacity of

22-6  a special agent or supervisor of an agency assisting producers of

22-7  insurance where his activities are limited to providing technical

22-8  advice and assistance to licensed producers and do not include sale,

22-9  solicitation or negotiation of insurance.

22-10     2.  A person who secures and furnishes information for the

22-11  purpose of group life insurance, group property and casualty

22-12  insurance, group annuities, or group or blanket accident and health

22-13  insurance, or for the purpose of enrolling natural persons under

22-14  plans, issuing certificates under plans or otherwise assisting in

22-15  administering plans, or who performs administrative services related

22-16  to mass marketed property and casualty insurance, if no commission

22-17  is paid to him for the service[.] and he does not sell, solicit or

22-18  negotiate insurance. As used in this subsection, “blanket accident

22-19  and health insurance” has the meaning ascribed to it in

22-20  NRS 689B.070.

22-21     3.  An employer or association or its officers, directors or

22-22  employees, or the trustees of an employees’ trust plan, to the extent

22-23  that the employer, association, officers, directors, employees or

22-24  trustees are engaged in the administration or operation of a program

22-25  of employees’ benefits for the employer’s or association’s own

22-26  employees or the employees of its subsidiaries or affiliates, if the

22-27  program involves the use of insurance issued by an insurer and the

22-28  employer, association, officers, directors, employees or trustees are

22-29  not compensated by the insurer issuing the contracts.

22-30     4.  Employees of insurers or organizations employed by

22-31  insurers who are engaged in the inspection, rating or classification

22-32  of risks or in the supervision of the training of producers of

22-33  insurance and are not individually engaged in the sale, solicitation or

22-34  negotiation of insurance.

22-35     5.  A person whose activities in this state are limited to

22-36  advertising, without the intent to solicit insurance in this state,

22-37  through communications in printed publications or electronic mass

22-38  media whose distribution is not limited to residents of this state, if

22-39  he does not sell, solicit or negotiate insurance of risks residing,

22-40  located or to be performed in this state.

22-41     6.  A salaried full-time employee who counsels or advises his

22-42  employer concerning the interests of the employer, or of the

22-43  subsidiaries or affiliates of the employer, in insurance, if the

22-44  employee does not sell or solicit insurance or receive a commission.

23-1      7.  An employee of a producer of insurance or an insurer who

23-2  responds to requests from holders of policies previously issued, if

23-3  the employee is not directly compensated according to the volume

23-4  of premiums that may result from those services and does not solicit

23-5  insurance or offer advice concerning terms or conditions of policies.

23-6      Sec. 25.  NRS 683A.251 is hereby amended to read as follows:

23-7      683A.251  1.  The Commissioner shall prescribe the form of

23-8  application by a natural person for a license as a resident producer

23-9  of insurance. The applicant must declare, under penalty of refusal to

23-10  issue, or suspension or revocation of, the license, that the statements

23-11  made in the application are true, correct and complete to the best of

23-12  his knowledge and belief. Before approving the application, the

23-13  Commissioner must find that the applicant has:

23-14     (a) Attained the age of 18 years;

23-15     (b) Not committed any act that is a ground for refusal to issue,

23-16  or suspension or revocation of, a license;

23-17     (c) Completed a course of study for the lines of authority for

23-18  which the application is made, unless the applicant is exempt from

23-19  this requirement;

23-20     (d) Paid the fee prescribed for the license and a fee of $15 for

23-21  deposit in the Insurance Recovery Account, neither of which may be

23-22  refunded; and

23-23     (e) Successfully passed the examinations for the lines of

23-24  authority for which application is made, unless the applicant is

23-25  exempt from this requirement.

23-26     2.  A business organization must be licensed as a producer of

23-27  insurance in order to act as such. Application must be made on a

23-28  form prescribed by the Commissioner. Before approving the

23-29  application, the Commissioner must find that the applicant has:

23-30     (a) Paid the fee prescribed for the license and a fee of $15 for

23-31  deposit in the Insurance Recovery Account, neither of which may be

23-32  refunded; and

23-33     (b) Designated a natural person who is licensed as a producer of

23-34  insurance and who is affiliated with the business organization to be

23-35  responsible for the organization’s compliance with the laws and

23-36  regulations of this state relating to insurance.

23-37     3.  A natural person who is a resident of this state applying for a

23-38  license must furnish a copy of a search concerning him conducted

23-39  by the Federal Bureau of Investigation in its national criminal

23-40  records[,] and of a search concerning him of the Central Repository

23-41  for Nevada Records of Criminal History. The Commissioner shall

23-42  adopt regulations concerning the procedures for obtaining this

23-43  information.

23-44     4.  The Commissioner may require any document reasonably

23-45  necessary to verify information contained in an application.

24-1      Sec. 26.  NRS 683A.261 is hereby amended to read as follows:

24-2      683A.261  1.  Unless the Commissioner refuses to issue the

24-3  license under NRS 683A.451, he shall issue a license as a producer

24-4  of insurance to a person who has satisfied the requirements of NRS

24-5  683A.241 and 683A.251. A producer of insurance may qualify for

24-6  a license in one or more of the lines of authority permitted by statute

24-7  or regulation, including:

24-8      (a) Life insurance on human lives, which includes benefits from

24-9  endowments and annuities and may include additional benefits from

24-10  death by accident and benefits for dismemberment by accident and

24-11  for disability.

24-12     (b) Health insurance for sickness, bodily injury or accidental

24-13  death, which may include benefits for disability.

24-14     (c) Property insurance for direct or consequential loss or damage

24-15  to property of every kind.

24-16     (d) Casualty insurance against legal liability, including liability

24-17  for death, injury or disability and damage to real or personal

24-18  property.

24-19     (e) Surety indemnifying financial institutions or providing bonds

24-20  for fidelity, performance of contracts[,] or financial guaranty.

24-21     (f) Variable annuities[,] and variable life insurance, including

24-22  coverage reflecting the results of a separate investment account.

24-23     (g) Credit insurance, including life, disability, property,

24-24  unemployment, involuntary unemployment, mortgage life, mortgage

24-25  guaranty, mortgage disability, guaranteed protection of assets, and

24-26  any other form of insurance offered in connection with an extension

24-27  of credit that is limited to wholly or partially extinguishing the

24-28  obligation which the Commissioner determines should be

24-29  considered as limited-line credit insurance.

24-30     (h) Personal lines, consisting of automobile and motorcycle

24-31  insurance and residential property insurance, including coverage for

24-32  flood, of personal watercraft and of excess liability, written over one

24-33  or more underlying policies of automobile or residential property

24-34  insurance.

24-35     (i) Fixed annuities as a limited line.

24-36     (j) Travel and baggage as a limited line.

24-37     (k) Rental car agency as a limited line.

24-38     2.  A license as a producer of insurance remains in effect unless

24-39  revoked, suspended[, allowed to expire] or otherwise terminated[,

24-40  if the license is renewed when due,] if a request for a renewal is

24-41  submitted on or before the date for the renewal specified on the

24-42  license, the fee for renewal and a fee of $15 for deposit in the

24-43  Insurance Recovery Account are paid for each license and each

24-44  affiliation with a business organization licensed pursuant to

24-45  subsection 2 of NRS 683A.251 , and any requirement for education

25-1  or any other requirement to renew the license is satisfied by the

25-2  [due date.] date specified on the license for the renewal. A

25-3  producer of insurance may submit a request for a renewal of his

25-4  license within 30 days after the date specified on the license for the

25-5  renewal if the producer of insurance otherwise complies with the

25-6  provisions of this subsection and pays, in addition to any fee paid

25-7  pursuant to this subsection, a penalty of 50 percent of the renewal

25-8  fee. A license as a producer of insurance expires if the

25-9  Commissioner receives a request for a renewal of the license more

25-10  than 30 days after the date specified on the license for the renewal.

25-11  A fee paid pursuant to this subsection is nonrefundable.

25-12     3.  A natural person who allows his license as a producer of

25-13  insurance to expire may reapply for the same license within 12

25-14  months after the date specified on the license for a renewal [was

25-15  due] without passing a written examination[,] or completing a

25-16  course of study required by paragraph (c) of subsection 1 of NRS

25-17  683A.251, but a penalty of twice the [unpaid] renewal fee is

25-18  required for any request for a renewal [fee] of the license that is

25-19  received after the [due date.] date specified on the license for the

25-20  renewal.

25-21     4.  A licensed producer of insurance who is unable to renew his

25-22  license because of military service, extended medical disability or

25-23  other extenuating circumstance may request a waiver of the time

25-24  limit and of [an examination,] any fine or sanction otherwise

25-25  required or imposed because of the failure to renew.

25-26     5.  A license must state the licensee’s name, address, personal

25-27  identification number, the date of issuance, the lines of authority and

25-28  the date of expiration and must contain any other information the

25-29  Commissioner considers necessary. A resident producer of

25-30  insurance shall maintain a place of business in this state which is

25-31  accessible to the public and where he principally conducts

25-32  transactions under his license. The place of business may be in his

25-33  residence. The license must be conspicuously displayed in an area of

25-34  the place of business which is open to the public.

25-35     6.  A licensee shall inform the Commissioner of [a] each

25-36  change of location from which he conducts business as a producer

25-37  of insurance and each change of business or residence address, in

25-38  writing or by other means acceptable to the Commissioner , within

25-39  30 days after the change. If a licensee changes [his] the location

25-40  from which he conducts business as a producer of insurance or

25-41  his business or residence address without giving written notice and

25-42  the Commissioner is unable to locate the licensee after diligent

25-43  effort, he may revoke the license without a hearing. The mailing of a

25-44  letter by certified mail, return receipt requested, addressed to the

25-45  licensee at his last mailing address appearing on the records of the

26-1  Division, and the return of the letter undelivered, constitutes a

26-2  diligent effort by the Commissioner.

26-3      Sec. 27.  NRS 683A.301 is hereby amended to read as follows:

26-4      683A.301  1.  An applicant for a license as a producer of

26-5  insurance or a licensee who desires to use a name other than his true

26-6  name as shown on the license shall submit a request for approval of

26-7  the name and file with the Commissioner a certified copy of the

26-8  certificate or any renewal certificate filed pursuant to chapter 602 of

26-9  NRS. An incorporated applicant or licensee shall file with the

26-10  Commissioner a document showing the corporation’s true name and

26-11  all fictitious names under which it conducts or intends to conduct

26-12  business. A licensee shall file promptly with the Commissioner a

26-13  written notice of any change in or discontinuance of the use of a

26-14  fictitious name.

26-15     2.  The Commissioner may disapprove in writing the use of a

26-16  true name, other than the true name of a natural person who is the

26-17  applicant or licensee, or a fictitious name of any applicant or

26-18  licensee, on any of the following grounds:

26-19     (a) The name interferes with or is deceptively similar to a name

26-20  already filed and in use by another licensee.

26-21     (b) Use of the name may mislead the public in any respect.

26-22     (c) The name states or implies that the applicant or licensee is an

26-23  insurer, motor club or hospital service plan or is entitled to engage

26-24  in activities related to insurance not permitted under the license

26-25  applied for or held.

26-26     (d) The name states or implies that the licensee is an

26-27  underwriter, but:

26-28         (1) A natural person licensed as an agent or broker for life

26-29  insurance may describe himself as an underwriter or “chartered life

26-30  underwriter” if entitled to do so;

26-31         (2) A natural person licensed for property and casualty

26-32  insurance may use the designation “chartered property and casualty

26-33  underwriter” if entitled thereto; and

26-34         (3) An insurance agent or brokers’ trade association may use

26-35  a name containing the word “underwriter.”

26-36     (e) The licensee [has already filed and not discontinued the use

26-37  of] submits a request to use more than [two names, including the

26-38  true name.] one fictitious name at a single business location.

26-39     3.  A licensee shall not use a name after written notice from the

26-40  Commissioner indicates that its use violates the provisions of this

26-41  section. If the Commissioner determines that the use is justified by

26-42  mitigating circumstances, he may permit, in writing, the use of the

26-43  name to continue for a specified reasonable period upon conditions

26-44  imposed by him for the protection of the public consistent with this

26-45  section.

27-1      4.  Paragraphs (a), (c) and (d) of subsection 2 do not apply to

27-2  the true name of an organization which on July 1, 1965, held under

27-3  that name a type of license similar to those governed by this chapter,

27-4  or to a fictitious name used on July 1, 1965, by a natural person or

27-5  organization holding such a license, if the fictitious name was filed

27-6  with the Commissioner on or before July 1, 1965.

27-7      Sec. 28.  NRS 683A.351 is hereby amended to read as follows:

27-8      683A.351  1.  Every producer of insurance shall keep

27-9  complete records of transactions under his license. The records must

27-10  show, for each insurance policy placed or countersigned by or

27-11  through the licensee, not less than the names of the insurer and

27-12  insured, the number and expiration date of, and premium payable as

27-13  to, the policy or contract, the names of all other persons from whom

27-14  business is accepted or to whom commissions are promised or paid,

27-15  all premiums collected, and such additional information as the

27-16  Commissioner may reasonably require.

27-17     2.  The records must be open to examination of the

27-18  Commissioner at all times, and the Commissioner may at any time

27-19  require the licensee to furnish to him, in such a manner or form as

27-20  he requires, any information kept or required to be kept in those

27-21  records. The records may be kept in an electronic format if, using

27-22  the electronic format, the records are retained in accordance with

27-23  this section.

27-24     3.  Records of a particular policy or contract may be destroyed

27-25  3 years after expiration of the policy or contract.

27-26     Sec. 29.  Chapter 683C of NRS is hereby amended by adding

27-27  thereto the provisions set forth as sections 30 and 31 of this act.

27-28     Sec. 30.  The provisions of chapters 679A and 679B of NRS

27-29  and NRS 683A.301, 683A.341 and 683A.351 apply to an insurance

27-30  consultant.

27-31     Sec. 31.  A licensee shall inform the Commissioner of all

27-32  locations from which business is conducted and of any change of

27-33  business or residence address, in writing or by any other means

27-34  acceptable to the Commissioner, within 30 days after the change.

27-35  If a licensee changes his address without giving written notice and

27-36  the Commissioner is unable to locate the licensee after making a

27-37  diligent effort, the Commissioner may revoke the license without a

27-38  hearing. The mailing of a letter by certified mail, return receipt

27-39  requested, addressed to the licensee at his last mailing address

27-40  appearing on the records of the Division, and the return of the

27-41  letter undelivered, constitutes a diligent effort by the

27-42  Commissioner.

 

 

 

28-1      Sec. 32.  NRS 683C.020 is hereby amended to read as follows:

28-2      683C.020  1.  Except as otherwise provided in subsection 2,

28-3  no person may engage in the business of an insurance consultant

28-4  unless a license has been issued to him by the Commissioner.

28-5      2.  An insurance consultant’s license is not required for:

28-6      (a) An attorney licensed to practice law in this state who is

28-7  acting in his professional capacity;

28-8      (b) A licensed insurance agent, broker or surplus lines broker;

28-9      (c) A trust officer of a bank who is acting in the normal course

28-10  of his employment; or

28-11     (d) An actuary or a certified public accountant who provides

28-12  information, recommendations, advice or services in his

28-13  professional capacity.

28-14     3.  A person required to be licensed in this state who acts as

28-15  an insurance consultant without a license is subject to an

28-16  administrative fine of not more than $1,000 for each act or

28-17  violation.

28-18     Sec. 33.  NRS 683C.030 is hereby amended to read as follows:

28-19     683C.030  1.  An application for a license to act as an

28-20  insurance consultant must be submitted to the Commissioner on

28-21  forms prescribed by the Commissioner and must be accompanied by

28-22  [a]the applicable license fee [of $78]set forth in NRS 680B.010

28-23  and an additional fee of $15 which must be deposited in the

28-24  Insurance Recovery Account created pursuant to NRS 679B.305.

28-25  The license fee and the additional fee are not refundable. If the

28-26  applicant is a natural person, the application must include the social

28-27  security number of the applicant.

28-28     2.  An applicant for an insurance consultant’s license must

28-29  successfully complete an examination and a course of instruction

28-30  which the Commissioner shall establish by regulation.

28-31     3.  Each license issued pursuant to this chapter is valid for 3

28-32  years from the date of issuance[,] or until it is suspended, revoked

28-33  or otherwise terminated.

28-34     Sec. 34.  NRS 683C.035 is hereby amended to read as follows:

28-35     683C.035  1.  The Commissioner shall prescribe the form of

28-36  application by a natural person for a license as an insurance

28-37  consultant. The applicant must declare, under penalty of refusal to

28-38  issue, or suspension or revocation of, the license, that the statements

28-39  made in the application are true, correct and complete to the best of

28-40  his knowledge and belief. Before approving the application, the

28-41  Commissioner must find that the applicant has:

28-42     (a) Attained the age of 18 years.

28-43     (b) Not committed any act that is a ground for refusal to issue,

28-44  or suspension or revocation of, a license[.] pursuant to

28-45  NRS 683A.451.

29-1      (c) Paid the fee prescribed for the license and a fee of $15 for

29-2  deposit in the Insurance Recovery Account, neither of which may be

29-3  refunded.

29-4      (d) Passed each examination required for the license and

29-5  successfully completed each course of instruction which the

29-6  Commissioner requires by regulation, unless he is a resident of

29-7  another state and holds a similar license in that state.

29-8      2.  A business organization must be licensed as an insurance

29-9  consultant in order to act as such. Application must be made on a

29-10  form prescribed by the Commissioner. Before approving the

29-11  application, the Commissioner must find that the applicant has:

29-12     (a) Paid the fee prescribed for the license and a fee of $15 for

29-13  deposit in the Insurance Recovery Account, neither of which may be

29-14  refunded; and

29-15     (b) Designated a natural person who is licensed as an insurance

29-16  consultant in this state and who is affiliated with the business

29-17  organization to be responsible for the organization’s compliance

29-18  with the laws and regulations of this state relating to insurance.

29-19     3.  The Commissioner may require any document reasonably

29-20  necessary to verify information contained in an application.

29-21     4.  A license issued pursuant to this chapter is valid for 3 years

29-22  after the date of issuance or until it is suspended, revoked or

29-23  otherwise terminated.

29-24     5.  An insurance consultant may qualify for a license

29-25  pursuant to this chapter in one or more of the lines of authority set

29-26  forth in paragraphs (a) to (d), inclusive, of subsection 1 of

29-27  NRS 683A.261.

29-28     Sec. 35.  NRS 683C.040 is hereby amended to read as follows:

29-29     683C.040  1.  A license may be renewed for additional 3-year

29-30  periods by submitting to the Commissioner an application for

29-31  renewal and:

29-32     [1.] (a) If the application is made:

29-33     [(a)] (1) On or before the expiration date of the license, the

29-34  applicable renewal fee and an additional fee of $15 for deposit in the

29-35  Insurance Recovery Account; or

29-36     [(b)] (2) Not more than 30 days after the expiration date of the

29-37  license, the applicable renewal fee plus any late fee required and an

29-38  additional fee of $15 for deposit in the Insurance Recovery Account;

29-39     [2.] (b) If the applicant is a natural person, the statement

29-40  required pursuant to NRS 683C.043; and

29-41     [3.] (c) If the applicant is a resident, proof of the successful

29-42  completion of appropriate courses of study required for renewal, as

29-43  established by the Commissioner by regulation.

29-44     2.  The fees specified in this section are not refundable.

 

30-1      Sec. 36.  NRS 683C.070 is hereby amended to read as follows:

30-2      683C.070  [No] A person licensed pursuant to this chapter may

30-3  not concurrently hold [an insurance agent’s license, broker’s] a

30-4  license as a producer of insurance or a surplus lines broker’s

30-5  license in any line.

30-6      Sec. 37.  NRS 683C.080 is hereby amended to read as follows:

30-7      683C.080  [No] A licensed insurance consultant [may] shall not

30-8  employ, be employed by or be in partnership with, or receive any

30-9  remuneration arising out of his activities as an insurance consultant

30-10  from, any licensed producer of insurance [agent, broker] or surplus

30-11  lines broker or insurer.

30-12     Sec. 38.  NRS 685A.070 is hereby amended to read as follows:

30-13     685A.070  1.  A broker shall not knowingly place surplus lines

30-14  insurance with an insurer which is unsound financially or ineligible

30-15  pursuant to this section.

30-16     2.  Except as otherwise provided in this section, [no]an insurer

30-17  is not eligible [for the acceptance of]to accept surplus lines risks

30-18  pursuant to this chapter unless it has surplus as to policyholders in

30-19  an amount of not less than [$5,000,000]$15,000,000 and, if an alien

30-20  insurer, unless it has and maintains in a bank or trust company

30-21  which is a member of the United States Federal Reserve System a

30-22  trust fund established pursuant to terms that are reasonably

30-23  adequate [for the protection of]to protect all of its policyholders in

30-24  the United States .[in an amount of not less than $1,500,000.] Such

30-25  a trust fund must not have an expiration date which is at any time

30-26  less than 5 years in the future, on a continuing basis. In the case of:

30-27     (a) A single alien insurer, such a trust fund must not be less

30-28  than the greater of $5,400,000 or 30 percent of the gross liabilities

30-29  of the alien insurer for surplus lines in the United States,

30-30  excluding any liabilities for aviation, wet marine and

30-31  transportation insurance, not to exceed $60,000,000, to be

30-32  determined annually on the basis of accounting practices and

30-33  procedures that are substantially equivalent to the accounting

30-34  practices and procedures applicable in this state as of

30-35  December 31 of the year immediately preceding the date of the

30-36  determination where:

30-37         (1) The liabilities are maintained in an irrevocable trust

30-38  account in a qualified financial institution in the United States, on

30-39  behalf of policyholders in the United States, consisting of cash,

30-40  securities, letters of credit or any other investments of substantially

30-41  the same character and quality as investments that are eligible

30-42  investments pursuant to chapter 682A of NRS for the capital and

30-43  statutory reserves of admitted insurers to write like kinds of

30-44  insurance in this state. The trust fund, which must be included in

30-45  any calculation of capital and surplus or its equivalent, must

31-1  comply with the requirements set forth in the Standard Trust

31-2  Agreement required for listing with the International Insurers

31-3  Department of the National Association of Insurance

31-4  Commissioners;

31-5          (2) The alien insurer may request approval by the

31-6  Commissioner to use the trust fund to pay any valid claim against

31-7  a surplus line if the balance of the trust fund is not, during any

31-8  period, less than $5,400,000 or 30 percent of the alien insurer’s

31-9  current gross liabilities for surplus lines in the United States,

31-10  excluding any liabilities for aviation, wet marine and

31-11  transportation insurance; and

31-12         (3) In calculating the amount of the trust fund required by

31-13  this subsection, credit must be given for any deposits for any

31-14  surplus lines that are separately required and maintained within a

31-15  state or territory of the United States, not to exceed the amount of

31-16  the alien insurer’s loss and loss adjustment reserves maintained in

31-17  that state or territory.

31-18     (b) A group of insurers which includes individual

31-19  unincorporated insurers, such a trust fund must not be less than

31-20  $100,000,000.

31-21     [(b)] (c) A group of incorporated insurers under common

31-22  administration, such a trust fund must not be less than

31-23  $100,000,000. Each insurer within the group must individually

31-24  maintain capital and surplus of not less than $25,000,000. The

31-25  group of incorporated insurers must:

31-26         (1) Operate under the supervision of the Department of Trade

31-27  and Industry of the United Kingdom;

31-28         (2) Possess aggregate policyholders surplus of

31-29  $10,000,000,000, which must consist of money in trust in an amount

31-30  not less than the assuming insurers’ liabilities attributable to

31-31  insurance written in the United States; and

31-32         (3) Maintain a joint trusteed surplus of which $100,000,000

31-33  must be held jointly for the benefit of United States ceding insurers

31-34  of any member of the group.

31-35     [(c)] (d) An insurance exchange created by the laws of a state,

31-36  the insurance exchange shall have and maintain a trust fund in an

31-37  amount of not less than [$50,000,000]$75,000,000 or have a

31-38  surplus as to policyholders in an amount of not less than

31-39  [$50,000,000.]$75,000,000. If an insurance exchange maintains

31-40  money for the protection of all policyholders, each syndicate shall

31-41  maintain minimum capital and surplus of not less than [$5,000,000]

31-42  $15,000,000 and must qualify separately to be eligible for the

31-43  acceptance of surplus lines risks pursuant to this chapter.

31-44  The Commissioner may require larger trust funds or surplus as to

31-45  policyholders than those set forth in this section if, in his judgment,

32-1  the volume of business being transacted or proposed to be transacted

32-2  warrants larger amounts.

32-3      3.  [No]An insurer is not eligible to write surplus lines of

32-4  insurance unless it has established a reputation for financial integrity

32-5  and satisfactory practices in underwriting and handling claims. In

32-6  addition, a foreign insurer must be authorized in the state of its

32-7  domicile to write the kinds of insurance which it intends to write in

32-8  Nevada.

32-9      4.  The Commissioner may from time to time compile or

32-10  approve a list of all surplus lines insurers deemed by him to be

32-11  eligible currently, and may mail a copy of the list to each broker at

32-12  his office last of record with the Commissioner. To be placed on the

32-13  list, a surplus lines insurer must file an application with the

32-14  Commissioner. The application must be accompanied by a

32-15  nonrefundable fee of $2,450. This subsection does not require the

32-16  Commissioner to determine the actual financial condition or claims

32-17  practices of any unauthorized insurer. The status of eligibility, if

32-18  granted by the Commissioner, indicates only that the insurer appears

32-19  to be sound financially and to have satisfactory claims practices, and

32-20  that the Commissioner has no credible evidence to the contrary.

32-21  While any such list is in effect, the broker shall restrict to the

32-22  insurers so listed all surplus lines business placed by him.

32-23     Sec. 38.3.  NRS 685A.080 is hereby amended to read as

32-24  follows:

32-25     685A.080 1.  Upon placing a surplus lines coverage, the

32-26  broker shall promptly issue and deliver to the insured evidence of

32-27  the insurance consisting either of the policy as issued by the insurer,

32-28  or, if such a policy is not then available, the surplus lines broker’s

32-29  certificate executed by the broker or a cover note . [endorsed by the

32-30  broker.] Such a certificate or [endorsed] cover note must show the

32-31  description and location of the subject of the insurance, coverage,

32-32  conditions and term of the insurance, the premium and rate charged

32-33  and taxes collected from the insured, and the name and address of

32-34  the insured and insurer and must state that the broker has verified

32-35  that the insurance described has been granted or issued. If the direct

32-36  risk is assumed by more than one insurer, the certificate must state

32-37  the name and address and proportion of the entire direct risk

32-38  assumed by each such insurer.

32-39     2.  A broker shall not issue any such certificate or any cover

32-40  note, or purport to insure or represent that insurance will be or has

32-41  been granted by any unauthorized insurer, unless he has prior

32-42  written authority from the insurer for the insurance, or has received

32-43  information from the insurer in the regular course of business that

32-44  the insurance has been granted, or an insurance policy providing the

33-1  insurance actually has been issued by the insurer and delivered to

33-2  the insured.

33-3      3.  If after the issuance and delivery of any such certificate there

33-4  is any change as to the identity of the insurers, or the proportion of

33-5  the direct risk assumed by an insurer as stated in the broker’s

33-6  original certificate, or in any other material respect as to the

33-7  insurance evidenced by the certificate, the broker shall promptly

33-8  issue and deliver to the insured a substitute certificate accurately

33-9  showing the current status of the coverage and the insurers

33-10  responsible thereunder.

33-11     4.  If a policy issued by the insurer is not available upon

33-12  placement of the insurance and the broker has issued and delivered

33-13  his certificate as provided in this section, upon request therefor by

33-14  the insured the broker shall as soon as reasonably possible procure

33-15  from the insurer its policy evidencing the insurance and deliver the

33-16  policy to the insured in replacement of the broker’s certificate

33-17  theretofore issued.

33-18     5.  Any surplus lines broker who knowingly or negligently

33-19  issues a false certificate of insurance or who fails promptly to notify

33-20  the insured of any material change with respect to the insurance by

33-21  delivery to the insured of a substitute certificate as provided in

33-22  subsection 3 is subject to the penalty provided by NRS 679A.180 or

33-23  to any greater applicable penalty otherwise provided by law.

33-24     Sec. 38.7. NRS 685A.090 is hereby amended to read as

33-25  follows:

33-26     685A.090  [Every] Each insurance contract procured and

33-27  delivered as a surplus lines coverage pursuant to this chapter must

33-28  [be countersigned by the broker who procured it, and must] have

33-29  conspicuously stamped upon it:

 

33-30  This insurance contract is issued pursuant to the Nevada

33-31  insurance laws by an insurer neither licensed by nor under the

33-32  supervision of the Division of Insurance of the Department of

33-33  Business and Industry of the State of Nevada. If the insurer is

33-34  found insolvent, a claim under this contract is not covered by

33-35  the Nevada Insurance Guaranty Association Act.

 

33-36     Sec. 39.  NRS 685A.120 is hereby amended to read as follows:

33-37     685A.120  1.  No person [in this state] may act as, hold

33-38  himself out as[,] or be a surplus lines broker with respect to subjects

33-39  of insurance resident, located or to be performed in this state or

33-40  elsewhere unless he is licensed as such by the Commissioner

33-41  pursuant to this chapter.

33-42     2.  Any person who has been licensed by this state as a [broker]

33-43  producer of insurance for general lines for at least 6 months, or has

34-1  been licensed in another state as a surplus lines broker [for at least 1

34-2  year] and continues to be licensed in that state, and who is deemed

34-3  by the Commissioner to be competent and trustworthy with respect

34-4  to the handling of surplus lines may be licensed as a surplus lines

34-5  broker upon:

34-6      (a) Application for a license and payment of the applicable fee

34-7  for a license and a fee of $15 for deposit in the Insurance Recovery

34-8  Account created by NRS 679B.305;

34-9      (b) Submitting the statement required pursuant to NRS

34-10  685A.127; and

34-11     (c) Passing any examination prescribed by the Commissioner on

34-12  the subject of surplus lines.

34-13     3.  An application for a license must be submitted to the

34-14  Commissioner on a form designated and furnished by him. The

34-15  application must include the social security number of the applicant.

34-16     4.  A license issued pursuant to this chapter continues in force

34-17  for 3 years unless it is suspended, revoked or otherwise terminated.

34-18  The license may be renewed upon submission of the statement

34-19  required pursuant to NRS 685A.127 and payment of the applicable

34-20  fee for renewal and a fee of $15 for deposit in the Insurance

34-21  Recovery Account created by NRS 679B.305 to the Commissioner

34-22  on or before the last day of the month in which the license is

34-23  renewable.

34-24     5.  A license which is not renewed expires at midnight on the

34-25  last day specified for its renewal. The Commissioner may accept a

34-26  request for renewal received by him within 30 days after the

34-27  expiration of the license if the request is accompanied by [the] :

34-28     (a) The statement required pursuant to NRS 685A.127[, a] ;

34-29     (b) The applicable fee for renewal [of 150] ;

34-30     (c) A penalty in an amount that is equal to 50 percent of the

34-31  applicable fee [otherwise required and a] for renewal; and

34-32     (d) A fee of $15 for deposit in the Insurance Recovery Account

34-33  created by NRS 679B.305.

34-34     Sec. 39.5. NRS 685A.180 is hereby amended to read as

34-35  follows:

34-36     685A.180  1.  On or before March 1 of each year each broker

34-37  shall pay to the Commissioner a tax on surplus lines coverages

34-38  written by him in unauthorized insurers during the preceding

34-39  calendar year at the same rate of tax as imposed by law on the

34-40  premiums of similar coverages written by authorized insurers. If a

34-41  broker has paid any taxes pursuant to NRS 685A.175, he shall

34-42  deduct the total paid from the tax due and pay the remainder, if any.

34-43     2.  For the purposes of this section, the “premium” on surplus

34-44  lines coverages includes:

35-1      (a) The gross amount charged by the insurer for the insurance,

35-2  less any return premium;

35-3      (b) Any fee allowed by NRS 685A.155;

35-4      (c) Any policy fee;

35-5      (d) Any membership fee; [and]

35-6      (e) Any inspection fee; and

35-7      (f) Any other fees or assessments charged by the insurer as

35-8  consideration for the insurance.

35-9  Premium does not include any additional amount charged for state

35-10  or federal tax, or for filing affidavits or reports of coverage . [,

35-11  inspection fee or the communication expenses of the broker.]

35-12     3.  If a contract for surplus lines insurance covers risks or

35-13  exposures only partially in this state, the tax so payable must be

35-14  computed on that portion of the premium properly allocable to the

35-15  risks or exposures located in this state. The Commissioner may

35-16  adopt regulations which establish standards for allocating premiums

35-17  for risks located in this state in the same manner as premiums are

35-18  allocated pursuant to NRS 680B.030.

35-19     4.  The Commissioner shall promptly deposit all taxes collected

35-20  by him pursuant to this section with the State Treasurer, to the credit

35-21  of the State General Fund.

35-22     5.  A broker who receives a credit for tax paid shall refund to

35-23  each insured the amount of the credit attributable to the insured

35-24  when the insurer pays a return premium or within 30 days,

35-25  whichever is earlier.

35-26     Sec. 40.  NRS 685B.080 is hereby amended to read as follows:

35-27     685B.080  1.  Any unauthorized insurer who transacts any

35-28  unauthorized act of an insurance business as set forth in the

35-29  Unauthorized Insurers Act may be fined not more than $10,000 for

35-30  each act or violation.

35-31     2.  In addition to any other penalties provided in this Code:

35-32     (a) Any producer of insurance or surplus lines broker licensed

35-33  in this state who in this state knowingly represents or aids an

35-34  unauthorized insurer in violation of the Unauthorized Insurers

35-35  Act is guilty of a category C felony and shall be punished as

35-36  provided in NRS 193.130.

35-37     (b) Any person other than a producer of insurance or surplus

35-38  lines broker licensed in this state who in this state represents or

35-39  aids an unauthorized insurer in violation of the Unauthorized

35-40  Insurers Act is guilty of a category C felony and shall be punished

35-41  as provided in NRS 193.130.

35-42     (c) Any person who commits a second or subsequent violation

35-43  of this section is guilty of a category B felony and shall be

35-44  punished by imprisonment in the state prison for a minimum term

36-1  of not less than 1 year and a maximum term of not more than 20

36-2  years.

36-3      3.  In addition to the penalties provided in subsection 2, such

36-4  a violator is liable, personally, jointly and severally with any other

36-5  person liable therefor, for the payment of premium taxes at the

36-6  same rate of tax as imposed by law on the premiums of similar

36-7  coverages written by authorized insurers.

36-8      Sec. 41.  Chapter 686B of NRS is hereby amended by adding

36-9  thereto the provisions set forth as sections 42 to 46, inclusive, of this

36-10  act.

36-11     Sec. 42.  As used in sections 42 to 46, inclusive, of this act,

36-12  unless the context otherwise requires, “insured” has the meaning

36-13  ascribed to it in NRS 686B.260.

36-14     Sec. 43.  The provisions of NRS 81.130 and 81.510 do not

36-15  apply to the conversion of an essential insurance association to a

36-16  domestic mutual insurer or a domestic reciprocal insurer as

36-17  provided in sections 42 to 46, inclusive, of this act.

36-18     Sec. 44.  1.  An essential insurance association shall, if

36-19  requested to do so by the Commissioner, file a notice of intent to

36-20  qualify as a domestic mutual insurer or a domestic reciprocal

36-21  insurer. In the absence of a request by the Commissioner, an

36-22  essential insurance association may file such a notice at such time

36-23  as the association determines appropriate.

36-24     2.  The notice must be filed with the Commissioner at least 4

36-25  months before the date the association is to become a domestic

36-26  mutual insurer or a domestic reciprocal insurer and must include:

36-27     (a) An application prepared pursuant to chapter 680A of NRS

36-28  for a certificate of authority to transact business in Nevada as a

36-29  domestic mutual insurer or a domestic reciprocal insurer;

36-30     (b) A valuation of the policyholder’s surplus according to both

36-31  market and amortized value based on the association’s annual

36-32  financial statement for the previous year; and

36-33     (c) A provision for the return of any unused portion of the

36-34  insured’s capital stabilization charges.

36-35     Sec. 45.  1.  At the time the association files a notice of

36-36  intent to qualify as a domestic mutual insurer or domestic

36-37  reciprocal insurer, it must give a notice of intent to all

36-38  participating insurers and all insureds on a form approved by the

36-39  Commissioner.

36-40     2.  Any participating insurer or insured may, within 30 days

36-41  after the date of the notice, apply to the Division for a hearing

36-42  concerning the association’s ability to qualify as a domestic

36-43  mutual insurer or domestic reciprocal insurer.

36-44     3.  An association must comply with the provisions of:

37-1      (a) Chapter 692B of NRS, as applicable to mutual insurers, to

37-2  qualify as a domestic mutual insurer; or

37-3      (b) Chapter 694B of NRS, as applicable to reciprocal insurers,

37-4  to qualify as a domestic reciprocal insurer.

37-5      Sec. 46.  Upon determining that an association has complied

37-6  with sections 42 to 46, inclusive, of this act and all other

37-7  requirements applicable to domestic mutual insurers, if the

37-8  association is qualifying as a domestic mutual insurer, or to

37-9  domestic reciprocal insurers, if the association is qualifying as a

37-10  domestic reciprocal insurer, the Commissioner may issue to the

37-11  association a certificate of authority to transact business as a

37-12  domestic mutual insurer or a domestic reciprocal insurer.

37-13     Sec. 47.  NRS 686B.030 is hereby amended to read as follows:

37-14     686B.030  1.  Except as otherwise provided in subsection 2,

37-15  NRS 686B.010 to 686B.1799, inclusive, apply to all kinds and lines

37-16  of direct insurance written on risks or operations in this state by any

37-17  insurer authorized to do business in this state, except:

37-18     (a) Ocean marine insurance;

37-19     (b) Contracts issued by fraternal benefit societies;

37-20     (c) Life insurance and credit life insurance;

37-21     (d) Variable and fixed annuities;

37-22     (e) Group and blanket health insurance and credit health

37-23  insurance;

37-24     (f) Property insurance for business and commercial risks; [and]

37-25     (g) Casualty insurance for business and commercial risks other

37-26  than insurance covering the liability of a practitioner licensed

37-27  pursuant to chapters 630 to 640, inclusive, of NRS[.] ; and

37-28     (h) Surety insurance.

37-29     2.  The exclusions set forth in paragraphs (f) and (g) of

37-30  subsection 1 extend only to issues related to the determination or

37-31  approval of premium rates.

37-32     Sec. 48.  NRS 686B.1781 is hereby amended to read as

37-33  follows:

37-34     686B.1781  [NRS 686B.1751 to 686B.1799, inclusive, do not

37-35  prohibit or regulate the payment of dividends, savings, unearned

37-36  premiums deposits or an equivalent abatement of premiums allowed

37-37  or returned by insurers to their policyholders, members or

37-38  subscribers.]

37-39     1.  An insurer shall not unfairly discriminate among its

37-40  policyholders in paying a dividend[.] , savings, unearned premium

37-41  deposits or an equivalent abatement of premiums allowed or

37-42  returned by an insurer for a policy of industrial insurance.

37-43     2.  A plan for the payment of dividends [is not a rating system

37-44  or plan.] for industrial insurance must be filed before there is a

37-45  dividend payment. The plan shall be deemed approved unless the

38-1  Commissioner disapproves the plan within 30 days after it is filed

38-2  and received by the Commissioner. An insurer shall not condition

38-3  the payment of [such] a dividend upon the renewal of a policy or

38-4  contract by the policyholder, member or subscriber.

38-5      3.  An insurer paying savings, unearned premium deposits or

38-6  an equivalent abatement for premiums allowed or returned for a

38-7  policy of industrial insurance must receive prior approval.

38-8      Sec. 49.  NRS 686B.230 is hereby amended to read as follows:

38-9      686B.230  1.  The Nevada Essential Insurance Association

38-10  has, for purposes of this section and to the extent approved by the

38-11  Commissioner, the general powers and authority granted under the

38-12  laws of this state to carriers licensed to transact the kinds of

38-13  insurance defined in NRS 681A.020 to 681A.080, inclusive.

38-14     2.  The Association may take any necessary action to make

38-15  available necessary insurance, including , but not limited to , the

38-16  following:

38-17     (a) Assess participating insurers amounts necessary to pay the

38-18  obligations of the Association, administration expenses, the cost of

38-19  examinations conducted pursuant to NRS 687A.110 and other

38-20  expenses authorized by this chapter. The assessment of each

38-21  member insurer for the kind or kinds of insurance designated in the

38-22  plan [shall] must be in the proportion that the net direct written

38-23  premiums of the member insurer for the preceding calendar year

38-24  bear to the net direct written premiums of all member insurers for

38-25  the preceding calendar year. A member insurer may not be assessed

38-26  in any year an amount greater than 5 percent of his net direct written

38-27  premiums for the preceding calendar year. Each member insurer

38-28  [shall] must be allowed a premium tax credit at the rate of 20

38-29  percent per year for 5 successive years [following termination of the

38-30  Association.] beginning on the first day of the calendar year after

38-31  the calendar year in which the insurer pays the assessment

38-32  pursuant to this subsection.

38-33     (b) Enter into such contracts as are necessary or proper to carry

38-34  out the provisions and purposes of this section.

38-35     (c) Sue or be sued, including taking any legal action necessary

38-36  to recover any assessments for, on behalf of or against participating

38-37  carriers.

38-38     (d) Investigate claims brought against the fund and adjust,

38-39  compromise, settle and pay covered claims to the extent of the

38-40  association’s obligation and deny all other claims. Process claims

38-41  through its employees or through one or more member insurers or

38-42  other persons designated as servicing facilities. Designation of a

38-43  service facility is subject to the approval of the Commissioner , but

38-44  such a designation may be declined by a member insurer.

38-45     (e) Classify risks as may be applicable and equitable.

39-1      (f) Establish appropriate rates, rate classifications and rating

39-2  adjustments and file [such] those rates with the Commissioner in

39-3  accordance with this chapter.

39-4      (g) Administer any type of reinsurance program for or on behalf

39-5  of the Association or any participating carriers.

39-6      (h) Pool risks among participating carriers.

39-7      (i) Issue and market, through agents, policies of insurance

39-8  providing the coverage required by this section in its own name or

39-9  on behalf of participating carriers.

39-10     (j) Administer separate pools, separate accounts or other plans

39-11  as may be deemed appropriate for separate carriers or groups of

39-12  carriers.

39-13     (k) Invest, reinvest and administer all funds and moneys held by

39-14  the Association.

39-15     (l) Borrow funds needed by the Association to [effect] carry out

39-16  the purposes of this section.

39-17     (m) Develop, effectuate and promulgate any loss-prevention

39-18  programs aimed at the best interests of the Association and the

39-19  insuring public.

39-20     (n) Operate and administer any combination of plans, pools,

39-21  reinsurance arrangements or other mechanisms as deemed

39-22  appropriate to best accomplish the fair and equitable operation of

39-23  the Association for the purposes of making available essential

39-24  insurance coverage.

39-25     3.  In providing for the recoupment of a deficit of the

39-26  Association, an option [shall] must be offered to an insured each

39-27  policy year to pay a capital stabilization charge which [shall] must

39-28  not exceed 100 percent of the premium charged to the insured in

39-29  that year. The Board of Directors shall determine the amount of the

39-30  charge from appropriate factors of loss experience and risk

39-31  associated with the Association and the insured. An insured who

39-32  pays the stabilization charge [shall] must not be required to pay any

39-33  assessment to recoup a deficit of the Association incurred in any

39-34  policy year for which the charge is paid. The Association’s plan of

39-35  operation [shall] must provide for the return to the insured of so

39-36  much of his payment as remains after all actual or potential

39-37  liabilities under the policy have been discharged.

39-38     Sec. 50.  NRS 686B.240 is hereby amended to read as follows:

39-39     686B.240  The Commissioner and the Nevada Essential

39-40  Insurance Association may:

39-41     1.  Give consideration to the need for adequate and readily

39-42  accessible coverage, to alternative methods of improving the market

39-43  affected, to the preferences of the insurers and agents, to the

39-44  inherent limitations of the insurance mechanism, to the need for

40-1  reasonable underwriting standards and to the requirement of

40-2  reasonable loss-prevention measures.

40-3      2.  Establish procedures that will create minimum interference

40-4  with the voluntary market.

40-5      3.  Spread the burden imposed by the facility equitably and

40-6  efficiently.

40-7      4.  Establish procedures for applicants and participants to have

40-8  grievances reviewed.

40-9      5.  Take all reasonable and necessary steps to dissolve the

40-10  Association at the earliest date when essential insurance becomes

40-11  readily available in the private market. The dissolution of the

40-12  Association, including its assets and liabilities, [shall] must be

40-13  accomplished under the supervision of the Commissioner in an

40-14  equitable and reasonable manner. The dissolution must, if

40-15  determined to be appropriate by the Commissioner, provide for the

40-16  repayment of any loans or other money provided or contributed by

40-17  the State of Nevada for the formation or continuance of the

40-18  Association.

40-19     Sec. 51.  NRS 686B.290 is hereby amended to read as follows:

40-20     686B.290  1.  At the time the Association files a notice of

40-21  intent to qualify as a domestic stock insurer, it must give notice of

40-22  its intent to all participating insurers and all insureds [in] on a form

40-23  approved by the Commissioner. The notice to each insured must

40-24  state the total amount of stock to be issued and the amount of shares

40-25  to which he is entitled.

40-26     2.  Any participating insurer or insured may, within 30 days

40-27  after the date of the notice, apply to the Division for a hearing

40-28  concerning the Association’s ability to qualify as a domestic insurer,

40-29  the valuation of capital and surplus , or the proposed number and

40-30  distribution of shares of stock.

40-31     Sec. 52.  NRS 686B.320 is hereby amended to read as follows:

40-32     686B.320  Upon determining that [an] the Association has

40-33  complied with NRS 686B.280 to 686B.310, inclusive, and all other

40-34  requirements applicable to domestic stock insurers, the

40-35  Commissioner may issue to the Association a certificate of authority

40-36  to transact business as a domestic stock insurer . [to become

40-37  effective the next following January 1.]

40-38     Sec. 53.  NRS 687A.033 is hereby amended to read as follows:

40-39     687A.033  1.  “Covered claim” means an unpaid claim or

40-40  judgment, including a claim for unearned premiums, which arises

40-41  out of and is within the coverage of an insurance policy to which

40-42  this chapter applies issued by an insurer which becomes an insolvent

40-43  insurer, if one of the following conditions exists:

40-44     (a) The claimant or insured, if a natural person, is a resident of

40-45  this state at the time of the insured event.

41-1      (b) The claimant or insured, if other than a natural person,

41-2  maintains its principal place of business in this state at the time of

41-3  the insured event.

41-4      (c) The property from which the first party property damage

41-5  claim arises is permanently located in this state.

41-6      (d) The claim is not a covered claim pursuant to the laws of any

41-7  other state and the premium tax imposed on the insurance policy is

41-8  payable in this state pursuant to NRS 680B.027.

41-9      2.  The term does not include:

41-10     (a) An amount that is directly or indirectly due a reinsurer,

41-11  insurer, insurance pool or underwriting association, as recovered by

41-12  subrogation, indemnity or contribution, or otherwise.

41-13     (b) That part of a loss which would not be payable because of a

41-14  provision for a deductible or a self-insured retention specified in the

41-15  policy.

41-16     (c) Except as otherwise provided in this paragraph, any claim

41-17  filed with the Association [after:

41-18         (1) Eighteen] :

41-19         (1) More than 18 months after the date of the order of

41-20  liquidation; or

41-21         (2) [The] After the final date set by the court for the filing of

41-22  claims against the liquidator or receiver of the insolvent

41-23  insurer,

41-24  whichever is earlier. The provisions of this paragraph do not apply

41-25  to a claim for workers’ compensation that is reopened pursuant to

41-26  the provisions of NRS 616C.390.

41-27     (d) A claim filed with the Association for a loss that is incurred

41-28  but is not reported to the Association before the expiration of the

41-29  period specified in subparagraph (1) or (2) of paragraph (c).

41-30     (e) An obligation to make a supplementary payment for

41-31  adjustment or attorney’s fees and expenses, court costs or interest

41-32  and bond premiums incurred by the insolvent insurer before the

41-33  appointment of a liquidator, unless the expenses would also be a

41-34  valid claim against the insured.

41-35     (f) A first party or third party claim brought by or against an

41-36  insured, if the aggregate net worth of the insured and any affiliate of

41-37  the insured, as determined on a consolidated basis, is more than

41-38  $25,000,000 on December 31 of the year immediately preceding the

41-39  date the insurer becomes an insolvent insurer. The provisions of this

41-40  paragraph do not apply to a claim for workers’ compensation. As

41-41  used in this paragraph, “affiliate” means a person who directly or

41-42  indirectly owns or controls, is owned or controlled by, or is under

41-43  common ownership or control with, another person. For the

41-44  purpose of this definition, the terms “owns,” “is owned” and

42-1  “ownership” mean ownership of an equity interest, or the

42-2  equivalent thereof, of 10 percent or more.

42-3      Sec. 54.  NRS 687A.060 is hereby amended to read as follows:

42-4      687A.060  1.  The Association:

42-5      (a) Is obligated to the extent of the covered claims existing

42-6  before the determination of insolvency and arising within 30 days

42-7  after the determination of insolvency, or before the expiration date

42-8  of the policy if that date is less than 30 days after the determination,

42-9  or before the insured replaces the policy or on request cancels

42-10  the policy if he does so within 30 days after the determination. The

42-11  obligation of the Association to pay a covered claim is limited to the

42-12  payment of:

42-13         (1) The entire amount of the claim, if the claim is for

42-14  workers’ compensation pursuant to the provisions of chapters 616A

42-15  to 616D, inclusive, or chapter 617 of NRS;

42-16         (2) [More than $100 but not] Not more than $300,000 for

42-17  each policy[,] if the claim is for the return of unearned premiums;

42-18  or

42-19         (3) The limit specified in a policy or $300,000, whichever is

42-20  less, for each occurrence for any covered claim other than a covered

42-21  claim specified in subparagraph (1) or (2).

42-22     (b) Shall be deemed the insurer to the extent of its obligations on

42-23  the covered claims and to that extent has any rights, duties and

42-24  obligations of the insolvent insurer as if the insurer had not become

42-25  insolvent. The rights include, without limitation, the right to seek

42-26  and obtain any recoverable salvage and to subrogate a covered

42-27  claim, to the extent that the Association has paid its obligation under

42-28  the claim.

42-29     (c) Shall assess member insurers amounts necessary to pay the

42-30  obligations of the Association pursuant to paragraph (a) after an

42-31  insolvency, the expenses of handling covered claims subsequent to

42-32  an insolvency, the cost of examinations pursuant to NRS 687A.110

42-33  [,] and other expenses authorized by this chapter. The assessment of

42-34  each member insurer must be in the proportion that the net direct

42-35  written premiums of the member insurer for the calendar year

42-36  preceding the assessment bear to the net direct written premiums of

42-37  all member insurers for the same calendar year. Each member

42-38  insurer must be notified of the assessment not later than 30 days

42-39  before it is due. No member insurer may be assessed in any year an

42-40  amount greater than 2 percent of the net direct written premiums of

42-41  that member insurer for the calendar year preceding the assessment.

42-42  If the maximum assessment, together with the other assets of the

42-43  Association, does not provide in any 1 year an amount sufficient to

42-44  make all necessary payments, the money available may be prorated

42-45  and the unpaid portion must be paid as soon as money becomes

43-1  available. The Association may pay claims in any order, including

43-2  the order in which the claims are received or in groups or categories.

43-3  The Association may exempt or defer, in whole or in part, the

43-4  assessment of any member insurer if the assessment would cause the

43-5  financial statement of the member insurer to reflect amounts of

43-6  capital or surplus less than the minimum amounts required for a

43-7  certificate of authority by any jurisdiction in which the member

43-8  insurer is authorized to transact insurance. During the period of

43-9  deferment, no dividends may be paid to shareholders or

43-10  policyholders. Deferred assessments must be paid when payment

43-11  will not reduce capital or surplus below required minimums.

43-12  Payments must be refunded to those companies receiving larger

43-13  assessments because of deferment, or, in the discretion of the

43-14  company, credited against future assessments. Each member insurer

43-15  must be allowed a premium tax credit for any amounts paid pursuant

43-16  to the provisions of this chapter:

43-17         (1) For assessments made before January 1, 1993, at the rate

43-18  of 10 percent per year for 10 successive years beginning March 1,

43-19  1996; or

43-20         (2) For assessments made on or after January 1, 1993, at the

43-21  rate of 20 percent per year for 5 successive years beginning with the

43-22  calendar year following the calendar year in which the assessments

43-23  are paid.

43-24     (d) Shall investigate claims brought against the fund and adjust,

43-25  compromise, settle and pay covered claims to the extent of the

43-26  obligation of the Association and deny any other claims.

43-27     (e) Shall notify such persons as the Commissioner directs

43-28  pursuant to paragraph (a) of subsection 2 of NRS 687A.080.

43-29     (f) Shall act on claims through its employees or through one or

43-30  more member insurers or other persons designated as servicing

43-31  facilities. Designation of a servicing facility is subject to the

43-32  approval of the Commissioner, but the designation may be declined

43-33  by a member insurer.

43-34     (g) Shall reimburse each servicing facility for obligations of

43-35  the Association paid by the facility and for expenses incurred by the

43-36  facility while handling claims on behalf of the Association[,] and

43-37  pay the other expenses of the Association authorized by this chapter.

43-38     2.  The Association may:

43-39     (a) Appear in, defend and appeal any action on a claim brought

43-40  against the Association.

43-41     (b) Employ or retain persons necessary to handle claims and

43-42  perform other duties of the Association.

43-43     (c) Borrow money necessary to carry out the purposes of this

43-44  chapter in accordance with the plan of operation.

43-45     (d) Sue or be sued.

44-1      (e) Negotiate and become a party to contracts necessary to carry

44-2  out the purposes of this chapter.

44-3      (f) Perform other acts necessary or proper to effectuate the

44-4  purposes of this chapter.

44-5      (g) If, at the end of any calendar year, the Board of Directors

44-6  finds that the assets of the Association exceed its liabilities as

44-7  estimated by the Board of Directors for the coming year, refund to

44-8  the member insurers in proportion to the contribution of each that

44-9  amount by which the assets of the Association exceed the liabilities.

44-10     (h) Assess each member insurer equally not more than $100 per

44-11  year for administrative expenses not related to the insolvency of any

44-12  insurer.

44-13     Sec. 55.  NRS 687A.090 is hereby amended to read as follows:

44-14     687A.090  1.  Any person recovering under this chapter shall

44-15  be deemed to have assigned his rights under the policy to the

44-16  Association to the extent of his recovery from the Association.

44-17  Every insured or claimant seeking the protection of this chapter

44-18  shall cooperate with the Association to the same extent as [such] the

44-19  person would have been required to cooperate with the insolvent

44-20  insurer. [The Association shall have no] Except as otherwise

44-21  provided in subsection 2, the Association does not have a cause of

44-22  action against the insured of the insolvent insurer for any sums it has

44-23  paid out.

44-24     2.  The Association may recover the amount of money paid to

44-25  or on behalf of an insured of an insolvent insurer:

44-26     (a) If the aggregate net worth of the insured and any affiliate

44-27  of the insured, as determined on a consolidated basis, is more than

44-28  $25,000,000 on December 31 of the year immediately preceding

44-29  the date the insurer becomes an insolvent insurer; or

44-30     (b) If the Association paid the money in error.

44-31     3.  The receiver, liquidator or statutory successor of an

44-32  insolvent insurer [shall be] is bound by any settlements of covered

44-33  claims by the Association or a similar organization in another state.

44-34  The court having jurisdiction shall grant [such] those claims priority

44-35  equal to that to which the claimant would have been entitled in the

44-36  absence of this chapter against the assets of the insolvent insurer.

44-37  The expenses of the Association or similar organization in handling

44-38  claims [shall] must be accorded the same priority as the liquidator’s

44-39  expenses.

44-40     [3.] 4.  The Association shall periodically file with the receiver

44-41  or liquidator of the insolvent insurer statements of the covered

44-42  claims paid by the Association and estimates of anticipated claims

44-43  on the Association, which statements shall preserve the rights of the

44-44  Association against the assets of the insolvent insurer.

45-1      5.  As used in this section, “affiliate” means a person who

45-2  directly or indirectly owns or controls, is owned or controlled by,

45-3  or is under common ownership or control with, another person.

45-4  For the purpose of this definition, the terms “owns,” “is owned”

45-5  and “ownership” mean ownership of an equity interest, or the

45-6  equivalent thereof, of 10 percent or more.

45-7      Sec. 55.5.  NRS 687B.145 is hereby amended to read as

45-8  follows:

45-9      687B.145  1.  Any policy of insurance or endorsement

45-10  providing coverage under the provisions of NRS 690B.020 or other

45-11  policy of casualty insurance may provide that if the insured has

45-12  coverage available to him under more than one policy or provision

45-13  of coverage, any recovery or benefits may equal but not exceed the

45-14  higher of the applicable limits of the respective coverages, and the

45-15  recovery or benefits must be prorated between the applicable

45-16  coverages in the proportion that their respective limits bear to the

45-17  aggregate of their limits. Any provision which limits benefits

45-18  pursuant to this section must be in clear language and be

45-19  prominently displayed in the policy, binder or endorsement. Any

45-20  limiting provision is void if the named insured has purchased

45-21  separate coverage on the same risk and has paid a premium

45-22  calculated for full reimbursement under that coverage.

45-23     2.  Except as otherwise provided in subsection 5, insurance

45-24  companies transacting motor vehicle insurance in this state must

45-25  offer, on a form approved by the Commissioner, uninsured and

45-26  underinsured vehicle coverage in an amount equal to the limits of

45-27  coverage for bodily injury sold to an insured under a policy of

45-28  insurance covering the use of a passenger car. The insurer is not

45-29  required to reoffer the coverage to the insured in any replacement,

45-30  reinstatement, substitute or amended policy, but the insured may

45-31  purchase the coverage by requesting it in writing from the insurer.

45-32  Each renewal must include a copy of the form offering such

45-33  coverage. Uninsured and underinsured vehicle coverage must

45-34  include a provision which enables the insured to recover up to the

45-35  limits of his own coverage any amount of damages for bodily injury

45-36  from his insurer which he is legally entitled to recover from the

45-37  owner or operator of the other vehicle to the extent that those

45-38  damages exceed the limits of the coverage for bodily injury carried

45-39  by that owner or operator. If an insured suffers actual damages

45-40  subject to the limitation of liability provided pursuant to NRS

45-41  41.035, underinsured vehicle coverage must include a provision

45-42  which enables the insured to recover up to the limits of his own

45-43  coverage any amount of damages for bodily injury from his

45-44  insurer for the actual damages suffered by the insured that exceed

45-45  that limitation of liability.

46-1      3.  An insurance company transacting motor vehicle insurance

46-2  in this state must offer an insured under a policy covering the use of

46-3  a passenger car, the option of purchasing coverage in an amount of

46-4  at least $1,000 for the payment of reasonable and necessary medical

46-5  expenses resulting from an accident. The offer must be made on a

46-6  form approved by the Commissioner. The insurer is not required to

46-7  reoffer the coverage to the insured in any replacement,

46-8  reinstatement, substitute or amended policy, but the insured may

46-9  purchase the coverage by requesting it in writing from the insurer.

46-10  Each renewal must include a copy of the form offering such

46-11  coverage.

46-12     4.  An insurer who makes a payment to an injured person on

46-13  account of underinsured vehicle coverage as described in subsection

46-14  2 is not entitled to subrogation against the underinsured motorist

46-15  who is liable for damages to the injured payee. This subsection does

46-16  not affect the right or remedy of an insurer under subsection 5 of

46-17  NRS 690B.020 with respect to uninsured vehicle coverage. As used

46-18  in this subsection, “damages” means the amount for which the

46-19  underinsured motorist is alleged to be liable to the claimant in

46-20  excess of the limits of bodily injury coverage set by the

46-21  underinsured motorist’s policy of casualty insurance.

46-22     5.  An insurer need not offer, provide or make available

46-23  uninsured or underinsured vehicle coverage in connection with a

46-24  general commercial liability policy, an excess policy, an umbrella

46-25  policy or other policy that does not provide primary motor vehicle

46-26  insurance for liabilities arising out of the ownership, maintenance,

46-27  operation or use of a specifically insured motor vehicle.

46-28     6.  As used in this section:

46-29     (a) “Excess policy” means a policy that protects a person against

46-30  loss in excess of a stated amount or in excess of coverage provided

46-31  pursuant to another insurance contract.

46-32     (b) “Passenger car” has the meaning ascribed to it in NRS

46-33  482.087.

46-34     (c) “Umbrella policy” means a policy that protects a person

46-35  against losses in excess of the underlying amount required to be

46-36  covered by other policies.

46-37     Sec. 56.  NRS 687B.350 is hereby amended to read as follows:

46-38     687B.350  1.  An insurer shall not renew a policy on different

46-39  terms, including different rates, unless the insurer notifies the

46-40  insured in writing of the different terms or rates at least [30] 60 days

46-41  before [those terms or rates become effective.] the expiration of the

46-42  policy. If the insurer [offers or purports to] fails to provide adequate

46-43  and timely notice, the insurer shall renew the policy [but on

46-44  different terms, including different rates, the policyholder may, for

46-45  30 days after he receives notice of the changes in the policy, cancel

47-1  the policy. If he elects to cancel, the insurer shall refund to him the

47-2  excess of the premium paid by him above the pro rata premium for

47-3  the expired portion of the new term.] at the expiring terms and

47-4  rates:

47-5      (a) For a period that is equal to the expiring term if the agreed

47-6  term is 1 year or less; or

47-7      (b) For 1 year if the agreed term is more than 1 year.

47-8      2.  For the purpose of subsection 1, if the policy is a policy of

47-9  industrial insurance, the term “rate” means the cost of insurance

47-10  based on a unit of exposure to liability before any adjustments are

47-11  made for an individual employer’s losses or expenses, or a

47-12  combination of both. The term does not include:

47-13     (a) The minimum premiums charged by an insurer;

47-14     (b) The prospective loss cost portion of the rate as filed by the

47-15  Advisory Organization and approved by the Commissioner

47-16  pursuant to NRS 686B.177; or

47-17     (c) Any experience modification factor applicable to the holder

47-18  of the policy.

47-19     Sec. 57.  NRS 690B.050 is hereby amended to read as follows:

47-20     690B.050  1.  Each insurer which issues a policy of insurance

47-21  covering the liability of a physician licensed under chapter 630 of

47-22  NRS or an osteopathic physician licensed under chapter 633 of NRS

47-23  for a breach of his professional duty toward a patient shall , within

47-24  30 days after a claim is closed under the policy, submit a report to

47-25  the Commissioner [within 30 days each settlement or award made or

47-26  judgment rendered by reason of a claim, giving the] concerning the

47-27  claim. The report must include, without limitation:

47-28     (a) The name and address of the claimant and [physician and]

47-29  the insured under the policy;

47-30     (b) A statement setting forth the circumstances of the case[.

47-31     2.] ;

47-32     (c) Information indicating whether any payment was made on

47-33  the claim and the amount of the payment, if any; and

47-34     (d) The information specified in subsection 2 of NRS

47-35  679B.144.

47-36     2.  An insurer who fails to comply with the provisions of

47-37  subsection 1 is subject to the imposition of an administrative fine

47-38  pursuant to NRS 679B.460.

47-39     3.  The Commissioner shall , within 30 days after receiving a

47-40  report from an insurer pursuant to this section, submit a report to

47-41  the Board of Medical Examiners or the state board of osteopathic

47-42  medicine, as applicable, [within 30 days after receiving the report of

47-43  the insurer, each claim made and each settlement, award or

47-44  judgment.] setting forth the information provided to the

47-45  Commissioner by the insurer pursuant to this section.

48-1      Sec. 58.  Chapter 692C of NRS is hereby amended by adding

48-2  thereto the provisions set forth as sections 59 to 65, inclusive, of this

48-3  act.

48-4      Sec. 59.  “Acquisition” means any agreement, arrangement

48-5  or activity, the consummation of which results in a person directly

48-6  or indirectly acquiring the control of another person. The term

48-7  includes, but is not limited to:

48-8      1.  The acquiring of a voting security;

48-9      2.  The acquiring of any asset;

48-10     3.  Bulk reinsurance; and

48-11     4.  A merger.

48-12     Sec. 60.  “Involved insurer” includes an insurer that:

48-13     1.  Acquires a person or is acquired by a person;

48-14     2.  Is affiliated with an insurer that acquires a person or is

48-15  acquired by a person; or

48-16     3.  Is the result of a merger.

48-17     Sec. 61.  The provisions of this chapter apply to any

48-18  acquisition in which a change in control of an insurer who is

48-19  authorized to do business in this state occurs, except:

48-20     1.  An acquisition that is subject to approval or disapproval by

48-21  the Commissioner pursuant to NRS 692C.180 to 692C.250,

48-22  inclusive.

48-23     2.  A purchase of securities solely for investment purposes if

48-24  the securities are not used for voting or not otherwise used to

48-25  cause or attempt to cause a substantial lessening of competition in

48-26  any insurance market in this state, except that, if a purchase of

48-27  securities creates a presumption of control of the insurer pursuant

48-28  to subsection 2 of NRS 692C.050, the purchase is not solely for

48-29  investment purposes unless the Commissioner of insurance of the

48-30  insurer’s state of domicile:

48-31     (a) Accepts a disclaimer of control or affirmatively finds that

48-32  control does not exist; and

48-33     (b) Submits the accepted disclaimer or a statement setting

48-34  forth the affirmative finding to the Commissioner.

48-35     3.  An acquisition of a person by another person if:

48-36     (a) Each of those persons is not directly or through an affiliate

48-37  primarily engaged in the business of insurance; and

48-38     (b) At least 30 days before the effective date of the acquisition,

48-39  a notice is filed with the Commissioner in accordance with section

48-40  62 of this act, if required.

48-41     4.  An acquisition by a person of an affiliate of that person.

48-42     5.  An acquisition that does not immediately cause:

48-43     (a) The combined market share of the involved insurers to

48-44  exceed 5 percent of the total market;

48-45     (b) An increase in any market share; or

49-1      (c) For any market:

49-2          (1) The combined market share of the involved insurers to

49-3  exceed 12 percent of the total market; and

49-4          (2) The market share to increase by more than 2 percent of

49-5  the total market.

49-6  As used in this subsection, “market” means direct written

49-7  premiums in this state for a line of authority set forth in the

49-8  annual statement required to be filed by insurers authorized to do

49-9  business in this state.

49-10     6.  An acquisition for which, solely because of the effect of the

49-11  acquisition on ocean marine insurance, a notification is required

49-12  pursuant to this section.

49-13     7.  An acquisition of an insurer whose domiciliary

49-14  commissioner of insurance:

49-15     (a) Determines that:

49-16         (1) The insurer is in a failing condition;

49-17         (2) A feasible alternative for improving that condition does

49-18  not exist; and

49-19         (3) The public benefit received from improving that

49-20  condition through the acquisition of the insurer outweighs the

49-21  public benefit received from increasing competition; and

49-22     (b) Submits his determination made pursuant to paragraph (a)

49-23  to the Commissioner.

49-24     Sec. 62.  1.  An acquisition to which the provisions of

49-25  section 61 of this act apply is subject to an order issued pursuant

49-26  to section 64 of this act unless:

49-27     (a) The acquiring person files a notice of acquisition pursuant

49-28  to this section; and

49-29     (b) The waiting period specified in subsection 4 has expired.

49-30     2.  The Commissioner shall prescribe the form of the notice

49-31  required pursuant to subsection 1. A notice of acquisition filed

49-32  pursuant to this section must include:

49-33     (a) The information required by the National Association of

49-34  Insurance Commissioners relating to any market that, pursuant to

49-35  subsection 5 of section 61 of this act, causes the acquisition not to

49-36  be exempted from the provisions of this section; and

49-37     (b) Any other material or information required by the

49-38  Commissioner to determine whether or not the proposed

49-39  acquisition, if consummated, would violate the provisions of

49-40  section 63 of this act.

49-41     3.  The information required pursuant to subsection 2 may

49-42  include the opinion of an economist relating to the competitive

49-43  effect of the acquisition on the business of insurance in this state

49-44  if the opinion is accompanied by a summary of the education and

50-1  experience of the economist and a statement indicating his ability

50-2  to provide an informed opinion.

50-3      4.  Except as otherwise provided in subsection 5, the waiting

50-4  period for an acquisition required pursuant to subsection 1 begins

50-5  on the date the Commissioner receives the notice filed pursuant to

50-6  subsection 1 and ends on the expiration of 30 days after that date

50-7  or on the expiration of a shorter period prescribed by the

50-8  Commissioner, whichever is earlier.

50-9      5.  Before the expiration of the waiting period specified in

50-10  subsection 4, the Commissioner may, not more than once, require

50-11  a person to submit additional information relating to the proposed

50-12  acquisition. If the Commissioner requires the submission of

50-13  additional information, the waiting period for the acquisition ends

50-14  upon the expiration of 30 days after the Commissioner receives the

50-15  additional information or upon the expiration of a shorter period

50-16  prescribed by the Commissioner, whichever is earlier.

50-17     Sec. 63.  1.  The Commissioner may issue an order pursuant

50-18  to section 64 of this act relating to an acquisition if:

50-19     (a) The effect of the acquisition may substantially lessen

50-20  competition in any line of insurance in this state or tend to create

50-21  a monopoly; or

50-22     (b) The acquiring person fails to file sufficient materials or

50-23  information pursuant to section 62 of this act.

50-24     2.  In determining whether to issue an order pursuant to

50-25  subsection 1, the Commissioner shall consider the standards set

50-26  forth in the Horizontal Merger Guidelines issued by the United

50-27  States Department of Justice and the Federal Trade Commission

50-28  and in effect at the time the Commissioner receives the notice

50-29  required pursuant to section 62 of this act.

50-30     3.  The Commissioner shall not issue an order specified in

50-31  subsection 1:

50-32     (a) If:

50-33         (1) The acquisition creates substantial economies of scale

50-34  or economies in the use of resources that may not be created in

50-35  any other manner; and

50-36         (2) The public benefit received from those economies

50-37  exceeds the public benefit received from not lessening

50-38  competition; or

50-39     (b) If:

50-40         (1) The acquisition substantially increases the availability

50-41  of insurance; and

50-42         (2) The public benefit received by that increase exceeds the

50-43  public benefit received from not lessening competition.

50-44     4.  The public benefits set forth in subparagraph 2 of

50-45  paragraphs (a) and (b) of subsection 3 may be considered

51-1  together, as applicable, in assessing whether the public benefits

51-2  received from the acquisition exceed any benefit to competition

51-3  that would arise from disapproving the acquisition.

51-4      5.  The Commissioner has the burden of establishing a

51-5  violation of the competitive standard set forth in subsection 1.

51-6      Sec. 64.  1.  Except as otherwise provided in this section, if

51-7  the Commissioner determines that an acquisition may

51-8  substantially lessen competition in any line of insurance in this

51-9  state or tends to create a monopoly, he may issue an order:

51-10     (a) Requiring an involved insurer to cease and desist from

51-11  doing business in this state relating to that line of insurance; or

51-12     (b) Denying the application of an acquired or acquiring

51-13  insurer for a license or authority to do business in this state.

51-14     2.  The Commissioner shall not issue an order pursuant to

51-15  subsection 1 unless:

51-16     (a) He conducts a hearing concerning the acquisition in

51-17  accordance with NRS 679B.310 to 679B.370, inclusive;

51-18     (b) A notice of the hearing is issued before the expiration of

51-19  the waiting period for the acquisition specified in section 62 of this

51-20  act, but not less than 15 days before the hearing; and

51-21     (c) The hearing is conducted and the order is issued not later

51-22  than 60 days after the expiration of the waiting period.

51-23     3.  Each order issued pursuant to subsection 1 must include a

51-24  written decision of the Commissioner setting forth his findings of

51-25  fact and conclusions of law relating to the acquisition.

51-26     4.  An order issued pursuant to this section does not become

51-27  final until 30 days after it is issued, during which time the involved

51-28  insurer may submit to the Commissioner a plan to remedy, within

51-29  a reasonable period, the anticompetitive effect of the acquisition.

51-30  As soon as practicable after receiving the plan, the Commissioner

51-31  shall, based upon the plan and any information included in the

51-32  plan, issue a written determination setting forth:

51-33     (a) The conditions or actions, if any, required to:

51-34         (1) Eliminate the anticompetitive effect of the acquisition;

51-35  and

51-36         (2) Vacate or modify the order; and

51-37     (b) The period in which the conditions or actions specified in

51-38  paragraph (a) must be performed.

51-39     5.  An order issued pursuant to subsection 1 does not apply to

51-40  an acquisition that is not consummated.

51-41     6.  A person who violates a cease and desist order issued

51-42  pursuant to this section during any period in which the order is in

51-43  effect is subject, at the discretion of the Commissioner, to:

51-44     (a) The imposition of a civil penalty of not more than $10,000

51-45  per day for each day the violation continues;

52-1      (b) The suspension or revocation of the person’s license or

52-2  certificate of authority; or

52-3      (c) Both the imposition of a civil penalty pursuant to

52-4  paragraph (a) and the suspension or revocation of the person’s

52-5  license or certificate of authority pursuant to paragraph (b).

52-6      7.  In addition to any fine imposed pursuant to NRS

52-7  692C.480, any insurer or other person who fails to make any filing

52-8  required by sections 61 to 64, inclusive, of this act and who fails to

52-9  make a good faith effort to comply with any such requirement is

52-10  subject to a fine of not more than $50,000.

52-11     8.  The provisions of NRS 692C.430, 692C.440 and 692C.460

52-12  do not apply to an acquisition to which the provisions of section 61

52-13  of this act apply.

52-14     Sec. 65.  1.  A director or officer of an insurance holding

52-15  company system who knowingly violates, or knowingly participates

52-16  in or assents to a violation of, NRS 692C.350, 692C.360, 692C.363

52-17  or 692C.390, or who knowingly permits any officer or agent of the

52-18  insurance holding company to engage in a transaction in violation

52-19  of NRS 692C.360 or 692C.363 or to pay a dividend or make an

52-20  extraordinary distribution in violation of NRS 692C.390 shall pay,

52-21  after receiving notice and a hearing before the Commissioner, a

52-22  fine of not more than $10,000 for each violation. In determining

52-23  the amount of the fine, the Commissioner shall consider the

52-24  appropriateness of the fine in relation to:

52-25     (a) The gravity of the violation;

52-26     (b) The history of any previous violations committed by the

52-27  director or officer; and

52-28     (c) Any other matters as justice may require.

52-29     2.  Whenever it appears to the Commissioner that an insurer

52-30  or any director, officer, employee or agent of the insurer has

52-31  engaged in a transaction or entered into a contract to which the

52-32  provisions of NRS 692C.363 apply and for which the insurer has

52-33  not obtained the Commissioner’s approval, the Commissioner may

52-34  order the insurer to cease and desist immediately from engaging in

52-35  any further activity relating to the transaction or contract. In

52-36  addition to issuing such an order, the Commissioner may order

52-37  the insurer to rescind the contract and return each party to the

52-38  contract to the position he was in before the execution of the

52-39  contract if the issuing of the order is in the best interest of:

52-40     (a) The policyholders or creditors of the insurer; or

52-41     (b) The members of the general public.

52-42     Sec. 66.  NRS 692C.020 is hereby amended to read as follows:

52-43     692C.020  As used in this chapter, unless the context otherwise

52-44  requires, the words and terms defined in NRS 692C.030 to

53-1  692C.110, inclusive, and sections 59 and 60 of this act, have the

53-2  meanings ascribed to them in those sections.

53-3      Sec. 67.  NRS 692C.080 is hereby amended to read as follows:

53-4      692C.080  “Person” includes an individual, corporation,

53-5  limited-liability company, partnership, association, joint stock

53-6  company, trust, unincorporated organization or any similar entity,

53-7  or any combination thereof acting in concert. The term does not

53-8  include [any] :

53-9      1.  Any joint venture partnership that is exclusively engaged

53-10  in owning, managing, leasing or developing any real or tangible

53-11  personal property; or

53-12     2.  Any securities broker performing no more than the usual and

53-13  customary broker’s function.

53-14     Sec. 68.  NRS 692C.140 is hereby amended to read as follows:

53-15     692C.140  In addition to making investments in common stock,

53-16  preferred stock, debt obligations and other securities permitted

53-17  under chapter 682A of NRS, a domestic insurer may invest:

53-18     1.  In common stock, preferred stock, debt obligations and other

53-19  securities of one or more subsidiaries, amounts which do not exceed

53-20  the lesser of 10 percent of the insurer’s assets or 50 percent of its

53-21  surplus as regards policyholders, if the insurer’s surplus as regards

53-22  policyholders remains at a reasonable level in relation to the

53-23  insurer’s outstanding liabilities and adequate to its financial needs.

53-24  In calculating the amount of such investments, the following must

53-25  be included:

53-26     (a) Total money or other consideration expended and obligations

53-27  assumed in the acquisition or formation of a subsidiary, including all

53-28  organizational expenses and contributions to capital and surplus of

53-29  the subsidiary whether or not represented by the purchase of capital

53-30  stock or issuance of other securities; and

53-31     (b) All amounts expended in acquiring additional common

53-32  stock, preferred stock, debt obligations and other securities and all

53-33  contributions to the capital or surplus of a subsidiary after its

53-34  acquisition or formation.

53-35     2.  Any amount in common stock, preferred stock, debt

53-36  obligations and other securities of one or more subsidiaries, if [the

53-37  insurer’s total liabilities, as calculated for the National Association

53-38  of Insurance Commissioners’ annual statement purposes, are less

53-39  than 10 percent of assets and if the insurer’s surplus remains as

53-40  regards policyholders, considering such investment as if it were a

53-41  disallowed asset, at a reasonable level in relation to the insurer’s

53-42  outstanding liabilities and adequate to its financial needs.

53-43     3.  Any amount in common stock, preferred stock, debt

53-44  obligations and other securities of one or more subsidiaries if] each

53-45  subsidiary agrees to limit its investments in any asset so that those

54-1  investments will not cause the amount of the total investment of the

54-2  insurer to exceed any of the investment limitations specified in

54-3  subsection 1 or in chapter 682A of NRS. For the purpose of this

54-4  subsection, “total investment of the insurer” includes any direct

54-5  investment by the insurer in an asset and the insurer’s proportionate

54-6  share of any investment in an asset by any subsidiary of the insurer,

54-7  which must be calculated by multiplying the amount of the

54-8  subsidiary’s investment by the percentage of the insurer’s ownership

54-9  of the subsidiary.

54-10     [4.] 3.  Any amount in common stock, preferred stock, debt

54-11  obligations or other securities of one or more subsidiaries, with the

54-12  approval of the Commissioner, if the insurer’s surplus as regards

54-13  policyholders remains at a reasonable level in relation to the

54-14  insurer’s outstanding liabilities and adequate to its financial needs.

54-15     [5.  Any amount in the common stock, preferred stock, debt

54-16  obligations or other securities of any subsidiary exclusively engaged

54-17  in holding title to or holding title to and managing or developing

54-18  real or personal property, if after considering as a disallowed asset

54-19  so much of the investment as is represented by subsidiary assets

54-20  which if held directly by the insurer would be considered as a

54-21  disallowed asset, the insurer’s surplus as regards policyholders will

54-22  remain at a reasonable level in relation to the insurer’s outstanding

54-23  liabilities and adequate to its financial needs, and if after the

54-24  investment all voting securities of the subsidiary are owned by the

54-25  insurer.]

54-26     Sec. 69.  NRS 692C.180 is hereby amended to read as follows:

54-27     692C.180  1.  No person other than the issuer may make a

54-28  tender for or a request or invitation for tenders of, or enter into any

54-29  agreement to exchange securities for, seek to acquire or acquire in

54-30  the open market or otherwise, any voting security of a domestic

54-31  insurer if, after the consummation thereof, he would directly or

54-32  indirectly, or by conversion or by exercise of any right to acquire, be

54-33  in control of the insurer , nor may any person enter into an

54-34  agreement to merge with or otherwise acquire control of a domestic

54-35  insurer, unless, at the time any such offer, request or invitation is

54-36  made or any such agreement is entered into, or before the

54-37  acquisition of those securities if no offer or agreement is involved,

54-38  he has filed with the Commissioner and has sent to the insurer, and

54-39  the insurer has sent to its shareholders, a statement containing the

54-40  information required by NRS 692C.180 to 692C.250, inclusive, and

54-41  the offer, request, invitation, agreement or acquisition has been

54-42  approved by the Commissioner in the manner prescribed in this

54-43  chapter.

54-44     2.  For purposes of this section, a domestic insurer includes any

54-45  other person controlling a domestic insurer unless the other person

55-1  is [either] directly or through [its] his affiliates primarily engaged in

55-2  a business other than the business of insurance. [However,] If a

55-3  person is directly or through his affiliates primarily engaged in

55-4  [another] a business other than the business of insurance, he shall ,

55-5  at least 60 days before the proposed effective date of the

55-6  acquisition, file a notice of intent to acquire[, on a form prescribed

55-7  by] with the Commissioner[, at least 60 days before the proposed

55-8  effective date of the acquisition.] setting forth the information

55-9  required by section 62 of this act.

55-10     Sec. 70.  NRS 692C.210 is hereby amended to read as follows:

55-11     692C.210  1.  [The] Except as otherwise provided in

55-12  subsection 5, the Commissioner shall approve any merger or other

55-13  acquisition of control referred to in NRS 692C.180 unless, after a

55-14  public hearing thereon, he finds that:

55-15     (a) After the change of control , the domestic insurer [referred

55-16  to] specified in NRS 692C.180 would not be able to satisfy the

55-17  requirements for the issuance of a license to write the line or lines of

55-18  insurance for which it is presently licensed;

55-19     (b) The effect of the merger or other acquisition of control

55-20  would be substantially to lessen competition in insurance in this

55-21  state or tend to create a monopoly ; [therein;]

55-22     (c) The financial condition of any acquiring party [is such as

55-23  might] may jeopardize the financial stability of the insurer, or

55-24  prejudice the interest of its policyholders or the interests of any

55-25  remaining security holders who are unaffiliated with the acquiring

55-26  party;

55-27     (d) The terms of the offer, request, invitation, agreement or

55-28  acquisition referred to in NRS 692C.180 are unfair and

55-29  unreasonable to the security holders of the insurer;

55-30     (e) The plans or proposals which the acquiring party has to

55-31  liquidate the insurer, sell its assets or consolidate or merge it with

55-32  any person, or to make any other material change in its business or

55-33  corporate structure or management, are unfair and unreasonable to

55-34  policyholders of the insurer and not in the public interest; [or]

55-35     (f) The competence, experience and integrity of those persons

55-36  who would control the operation of the insurer are such that it would

55-37  not be in the interest of policyholders of the insurer and of the public

55-38  to permit the merger or other acquisition of control[.] ; or

55-39     (g) If approved, the merger or acquisition of control would

55-40  likely be harmful or prejudicial to the members of the public who

55-41  purchase insurance.

55-42     2.  The public hearing [referred to] specified in subsection 1

55-43  must be held within 30 days after the statement required by NRS

55-44  692C.180 has been filed, and at least 20 days’ notice thereof must

55-45  be given by the Commissioner to the person filing the statement.

56-1  Not less than 7 days’ notice of the public hearing must be given by

56-2  the person filing the statement to the insurer and to [such other

56-3  persons as may be] any other person designated by the

56-4  Commissioner. The insurer shall give such notice to its security

56-5  holders. The Commissioner shall make a determination within 30

56-6  days after the conclusion of the hearing. If he determines that an

56-7  infusion of capital to restore capital in connection with the change in

56-8  control is required, the requirement must be met within 60 days after

56-9  notification is given of the determination. At the hearing, the person

56-10  filing the statement, the insurer, any person to whom notice of

56-11  hearing was sent[,] and any other person whose interests may be

56-12  affected thereby may present evidence, examine and cross-examine

56-13  witnesses, and offer oral and written arguments and , in connection

56-14  therewith , may conduct discovery proceedings in the same manner

56-15  as is presently allowed in the district court of this state. All

56-16  discovery proceedings must be concluded not later than 3 days

56-17  before the commencement of the public hearing.

56-18     3.  The Commissioner may retain at the acquiring party’s

56-19  expense attorneys, actuaries, accountants and other experts not

56-20  otherwise a part of his staff as may be reasonably necessary to assist

56-21  him in reviewing the proposed acquisition of control.

56-22     4.  The period for review by the Commissioner must not exceed

56-23  the 60 days allowed between the filing of the notice of intent to

56-24  acquire required pursuant to subsection 2 of NRS 692C.180 and

56-25  the date of the proposed acquisition if the proposed affiliation or

56-26  change of control involves a financial institution, or an affiliate of a

56-27  financial institution, and an insured.

56-28     5.  When making a determination pursuant to paragraph (b)

56-29  of subsection 1, the Commissioner:

56-30     (a) Shall require the submission of the information specified

56-31  in subsection 2 of section 62 of this act;

56-32     (b) Shall not disapprove the merger or acquisition of control if

56-33  he finds that any of the circumstances specified in subsection 3 of

56-34  section 63 of this act exist; and

56-35     (c) May condition his approval of the merger or acquisition of

56-36  control in the manner provided in subsection 4 of section 64 of

56-37  this act.

56-38     6.  If, in connection with a change of control of a domestic

56-39  insurer, the Commissioner determines that the person who is

56-40  acquiring control of the domestic insurer must maintain or restore

56-41  the capital of the domestic insurer in an amount that is required

56-42  by the laws and regulations of this state, the Commissioner shall

56-43  make the determination not later than 60 days after the notice of

56-44  intent to acquire required pursuant to subsection 2 of NRS

56-45  692C.180 is filed with the Commissioner.

57-1      Sec. 71.  NRS 692C.260 is hereby amended to read as follows:

57-2      692C.260  1.  Every insurer which is authorized to do business

57-3  in this state and which is a member of an insurance holding

57-4  company system shall register with the Commissioner, except a

57-5  foreign insurer subject to disclosure requirements and standards

57-6  adopted by a statute or regulation in the jurisdiction of its domicile

57-7  which are substantially similar to those contained in NRS 692C.260

57-8  to 692C.350, inclusive.

57-9      2.  Any insurer which is subject to registration under NRS

57-10  692C.260 to 692C.350, inclusive, shall register [no] not later than

57-11  September 1, 1973, or 15 days after it becomes subject to

57-12  registration, whichever is later, unless the Commissioner for good

57-13  cause shown extends the time for registration. The Commissioner

57-14  may require any authorized insurer which is a member of a holding

57-15  company system which is not subject to registration under this

57-16  section to furnish a copy of the registration statement or other

57-17  information filed by [such] the insurance company with the

57-18  insurance regulatory authority of domiciliary jurisdiction.

57-19     3.  Any person within an insurance holding company system

57-20  subject to registration shall, upon request by an insurer, provide

57-21  complete and accurate information to the insurer if the

57-22  information is reasonably necessary to enable the insurer to

57-23  comply with the provisions of this section.

57-24     Sec. 72.  NRS 692C.270 is hereby amended to read as follows:

57-25     692C.270  Every insurer subject to registration shall file a

57-26  registration statement on a form provided by the Commissioner,

57-27  which [shall] must contain current information about:

57-28     1.  The capital structure, general financial condition, ownership

57-29  and management of the insurer and any person controlling the

57-30  insurer.

57-31     2.  The identity of every member of the insurance holding

57-32  company system.

57-33     3.  The following agreements in force, relationships subsisting

57-34  and transactions currently outstanding between [such] the insurer

57-35  and its affiliates:

57-36     (a) Loans, other investments or purchases, sales or exchanges of

57-37  securities of the affiliates by the insurer or of the insurer by its

57-38  affiliates.

57-39     (b) Purchases, sales or exchanges of assets.

57-40     (c) Transactions not in the ordinary course of business.

57-41     (d) Guarantees or undertakings for the benefit of an affiliate

57-42  which result in an actual contingent exposure of the insurer’s assets

57-43  to liability, other than insurance contracts entered into in the

57-44  ordinary course of the insurer’s business.

58-1      (e) All management and service contracts and all cost-sharing

58-2  arrangements, other than cost allocation arrangements based upon

58-3  generally accepted accounting principles.

58-4      (f) Reinsurance agreements covering all or substantially all of

58-5  one or more lines of insurance of the ceding company.

58-6      (g) Any dividend or other distribution made to a shareholder.

58-7      (h) Any consolidated agreement to allocate taxes.

58-8      4.  [Other] Any pledge of the insurer’s stock, including the

58-9  stock of any subsidiary or controlling affiliate of the insurer, for a

58-10  loan made to any member of the insurance holding company

58-11  system.

58-12     5.  Any other matters concerning transactions between

58-13  registered insurers and any affiliates as may be included from time

58-14  to time in any registration forms adopted or approved by the

58-15  Commissioner.

58-16     Sec. 73.  NRS 692C.330 is hereby amended to read as follows:

58-17     692C.330  1.  Any person may file with the Commissioner

58-18  [a] :

58-19     (a) A disclaimer of affiliation with any authorized insurer

58-20  specified in the disclaimer; or [such a]

58-21     (b) A request for a termination of registration on the basis that

58-22  the person does not, or will not after taking an action specified in

58-23  the request for termination, control another person specified in the

58-24  request.

58-25     2.  A disclaimer of affiliation or request for a termination of

58-26  registration specified in subsection 1 may be filed by [such] the

58-27  authorized insurer or any member of an insurance holding company

58-28  system. [The disclaimer shall fully disclose] A disclaimer of

58-29  affiliation or request for a termination of registration filed

58-30  pursuant to subsection 1 must include:

58-31     (a) A statement indicating the number of authorized, issued

58-32  and outstanding voting securities of the person specified in the

58-33  disclaimer of affiliation or request for a termination of

58-34  registration;

58-35     (b) A statement indicating the number and percentage of

58-36  shares of the person specified in the disclaimer of affiliation or

58-37  request for a termination of registration that are owned or

58-38  beneficially owned by the person disclaiming control, and the

58-39  number of those shares for which the person disclaiming control

58-40  has a direct or indirect right to acquire;

58-41     (c) A statement setting forth all material relationships and bases

58-42  for affiliation between [such person and such insurer as well as the

58-43  basis for disclaiming such affiliation.

58-44     2.] the person specified in the disclaimer of affiliation or

58-45  request for a termination of registration and the person and any

59-1  affiliate of the person who is disclaiming control of the person

59-2  specified in the disclaimer of affiliation or request for a

59-3  termination of registration; and

59-4      (d) An explanation of why the person who is disclaiming

59-5  control does not control the person specified in the disclaimer of

59-6  affiliation or request for a termination of registration.

59-7      3.  A request for a termination of registration filed pursuant to

59-8  subsection 1 shall be deemed granted upon filing unless the

59-9  Commissioner, within 30 days after receipt of the request for a

59-10  termination of registration, notifies the person, authorized insurer

59-11  or member of an insurance holding company system that the

59-12  request is denied.

59-13     4. After a disclaimer of affiliation has been filed, the insurer

59-14  [shall be] is relieved of any duty to register or report under NRS

59-15  692C.260 to 692C.350, inclusive, which may arise out of the

59-16  insurer’s relationship with [such] the person unless the

59-17  Commissioner disallows [such a] the disclaimer. The Commissioner

59-18  [shall disallow such a] may disallow the disclaimer only after

59-19  furnishing all parties in interest with a notice and opportunity to be

59-20  heard and after making specific findings of fact to support [such] the

59-21  disallowance.

59-22     Sec. 74.  NRS 692C.350 is hereby amended to read as follows:

59-23     692C.350  1.  The failure to file a registration statement or any

59-24  amendment thereto required by NRS 692C.260 to 692C.350,

59-25  inclusive, within the time specified for [such filing, shall be] the

59-26  filing is a violation of NRS 692C.260 to 692C.350, inclusive.

59-27     2.  Except as otherwise provided in subsection 3, if an insurer

59-28  fails, without just cause, to file a registration statement required

59-29  pursuant to NRS 692C.270, the insurer shall, after receiving

59-30  notice and a hearing, pay a civil penalty of $100 for each day the

59-31  insurer fails to file the registration statement. The civil penalty

59-32  may be recovered in a civil action brought by the Commissioner.

59-33  Any civil penalty paid pursuant to this subsection must be

59-34  deposited in the State General Fund.

59-35     3.  The maximum civil penalty that may be imposed pursuant

59-36  to subsection 2 is $20,000. The Commissioner may reduce the

59-37  amount of the civil penalty if the insurer demonstrates to the

59-38  satisfaction of the Commissioner that the payment of the civil

59-39  penalty would impose a financial hardship on the insurer.

59-40     4.  Any officer, director or employee of an insurance holding

59-41  company system who willfully and knowingly subscribes to or

59-42  makes or causes to be made any false statement, false report or

59-43  false filing with the intent to deceive the Commissioner in the

59-44  performance of his duties pursuant to NRS 692C.260 to 692C.350,

59-45  inclusive, is guilty of a category D felony and shall be punished as

60-1  provided in NRS 193.130. The officer, director or employee is

60-2  personally liable for any fine imposed against him pursuant to that

60-3  section.

60-4      Sec. 75.  NRS 692C.363 is hereby amended to read as follows:

60-5      692C.363  1.  A domestic insurer shall not enter into any of

60-6  the following transactions with an affiliate unless the insurer has

60-7  notified the Commissioner in writing of its intention to enter into the

60-8  transaction at least 60 days previously, or such shorter period as the

60-9  Commissioner may permit, and the Commissioner has not

60-10  disapproved it within that period:

60-11     (a) A sale, purchase, exchange, loan or extension of credit,

60-12  guaranty or investment if the transaction equals at least:

60-13         (1) With respect to an insurer other than a life insurer, the

60-14  lesser of 3 percent of the insurer’s admitted assets or 25 percent of

60-15  surplus as regards policyholders; or

60-16         (2) With respect to a life insurer, 3 percent of the insurer’s

60-17  admitted assets,

60-18  computed as of December 31 next preceding the transaction.

60-19     (b) A loan or extension of credit to any person who is not an

60-20  affiliate, if the insurer makes the loan or extension of credit with the

60-21  agreement or understanding that the proceeds of the transaction, in

60-22  whole or in substantial part, are to be used to make loans or

60-23  extensions of credit to, to purchase assets of, or to make investments

60-24  in, any affiliate of the insurer if the transaction equals at least:

60-25         (1) With respect to insurers other than life insurers, the lesser

60-26  of 3 percent of the insurer’s admitted assets or 25 percent of surplus

60-27  as regards policyholders; or

60-28         (2) With respect to life insurers, 3 percent of the insurer’s

60-29  admitted assets,

60-30  computed as of December 31 next preceding the transaction.

60-31     (c) An agreement for reinsurance or a modification thereto in

60-32  which the premium for reinsurance or a change in the insurer’s

60-33  liabilities equals at least 5 percent of the insurer’s surplus as regards

60-34  policyholders as of December 31 next preceding the transaction,

60-35  including an agreement which requires as consideration the transfer

60-36  of assets from an insurer to a nonaffiliate, if an agreement or

60-37  understanding exists between the insurer and nonaffiliate that any

60-38  portion of those assets will be transferred to an affiliate of the

60-39  insurer.

60-40     (d) An agreement for management, contract for service,

60-41  guarantee or arrangement to share costs.

60-42     (e) A guaranty made by a domestic insurer, except that a

60-43  guaranty that is quantifiable as to amount is not subject to

60-44  the provisions of this subsection unless the guaranty exceeds the

60-45  lesser of one-half of 1 percent of the admitted assets of the

61-1  domestic insurer or 10 percent of its surplus as regards

61-2  policyholders as of December 31 next preceding the guaranty.

61-3      (f) Except as otherwise provided in subsection 3, a direct or

61-4  indirect acquisition of or investment in a person who controls the

61-5  domestic insurer or an affiliate of the domestic insurer in an

61-6  amount that, when added to its present holdings, exceeds 2.5

61-7  percent of the domestic insurer’s surplus to policyholders.

61-8      (g) A material transaction, specified by regulation, which the

61-9  Commissioner determines may adversely affect the interest of the

61-10  insurer’s policyholders.

61-11     2.  This section does not authorize or permit any transaction

61-12  which, in the case of an insurer not an affiliate, would be contrary to

61-13  law.

61-14     3.  The provisions of paragraph (f) of subsection 1 do not

61-15  apply to a direct or indirect acquisition of or investment in:

61-16     (a) A subsidiary acquired in accordance with this section or

61-17  NRS 692C.140; or

61-18     (b) A nonsubsidiary insurance affiliate that is subject to the

61-19  provisions of this chapter.

61-20     Sec. 76.  (Deleted by amendment.)

61-21     Sec. 77.  NRS 692C.390 is hereby amended to read as follows:

61-22     692C.390  [No]

61-23     1.  An insurer subject to registration under NRS 692C.260 to

61-24  692C.350, inclusive, shall not pay any extraordinary dividend or

61-25  make any other extraordinary distribution to its shareholders until:

61-26     [1.] (a) Thirty days after the Commissioner has received notice

61-27  of the declaration thereof and has not within [such] that period

61-28  disapproved [such] the payment; or

61-29     [2.] (b) The Commissioner [shall have approved such] approves

61-30  the payment within [such] the 30-day period.

61-31     2.  A request for approval of an extraordinary dividend or any

61-32  other extraordinary distribution pursuant to subsection 1 must

61-33  include:

61-34     (a) A statement indicating the amount of the proposed

61-35  dividend or distribution;

61-36     (b) The date established for the payment of the proposed

61-37  dividend or distribution;

61-38     (c) A statement indicating whether the proposed dividend or

61-39  distribution is to be paid in the form of cash or property and, if it is

61-40  to be paid in the form of property, a description of the property, its

61-41  cost and its fair market value together with an explanation setting

61-42  forth the basis for determining its fair market value;

61-43     (d) A copy of a work paper or other document setting forth the

61-44  calculations used to determine that the proposed dividend or

61-45  distribution is extraordinary, including:

62-1          (1) The amount, date and form of payment of each regular

62-2  dividend or distribution paid by the insurer, other than any

62-3  distribution of a security of the insurer, within the 12 consecutive

62-4  months immediately preceding the date established for the

62-5  payment of the proposed dividend or distribution;

62-6          (2) The amount of surplus, if any, as regards policyholders,

62-7  including total capital and surplus, as of December 31 next

62-8  preceding;

62-9          (3) If the insurer is a life insurer, the amount of any net

62-10  gains obtained from the operations of the insurer for the 12-month

62-11  period ending December 31 next preceding;

62-12         (4) If the insurer is not a life insurer, the amount of net

62-13  income of the insurer less any realized capital gains for the 12-

62-14  month period ending on the December 31 of the year next

62-15  preceding and the two consecutive 12-month periods immediately

62-16  preceding that period; and

62-17         (5) If the insurer is not a life insurer, the amount of each

62-18  dividend paid by the insurer to shareholders, other than a

62-19  distribution of any securities of the insurer, during the preceding 2

62-20  calendar years;

62-21     (e) A balance sheet and statement of income for the period

62-22  beginning on the date of the last annual statement filed by the

62-23  insurer with the Commissioner and ending on the last day of the

62-24  month immediately preceding the month in which the insurer files

62-25  the request for approval; and

62-26     (f) A brief statement setting forth:

62-27         (1) The effect of the proposed dividend or distribution upon

62-28  the insurer’s surplus;

62-29         (2) The reasonableness of the insurer’s surplus in relation

62-30  to the insurer’s outstanding liabilities; and

62-31         (3) The adequacy of the insurer’s surplus in relation to the

62-32  insurer’s financial requirements.

62-33     3.  Each insurer specified in subsection 1 that pays an

62-34  extraordinary dividend or makes any other extraordinary

62-35  distribution to its shareholders shall, within 15 days after

62-36  declaring the dividend or making the distribution, report that fact

62-37  to the Commissioner. The report must include the information

62-38  specified in paragraph (d) of subsection 2.

62-39     Sec. 78.  NRS 692C.420 is hereby amended to read as follows:

62-40     692C.420  1.  All information, documents and copies thereof

62-41  obtained by or disclosed to the Commissioner or any other person in

62-42  the course of an examination or investigation made pursuant to NRS

62-43  692C.410, and all information reported pursuant to NRS 692C.260

62-44  to 692C.350, inclusive, [shall] must be given confidential treatment

62-45  and [shall not be] is not subject to subpoena and [shall] must not be

63-1  made public by the Commissioner or any other person, except to

63-2  insurance departments of other states, without the prior written

63-3  consent of the insurer to which it pertains unless the Commissioner,

63-4  after giving the insurer and its affiliates who would be affected

63-5  thereby[,] notice and an opportunity to be heard, determines that

63-6  the interests of policyholders, shareholders or the public will be

63-7  served by the publication thereof, in which event he may publish all

63-8  or any part thereof in [such] any manner as he may deem

63-9  appropriate.

63-10     2.  The Commissioner or any person who receives any

63-11  documents, materials or other information while acting under the

63-12  authority of the Commissioner must not be permitted or required

63-13  to testify in a private civil action concerning any information,

63-14  document or copy thereof specified in subsection 1.

63-15     3.  The Commissioner may share or receive any information,

63-16  document or copy thereof specified in subsection 1 in accordance

63-17  with section 1 of this act. The sharing or receipt of the

63-18  information, document or copy pursuant to this subsection does

63-19  not waive any applicable privilege or claim of confidentiality in the

63-20  information, document or copy.

63-21     Sec. 79.  NRS 694C.050 is hereby amended to read as follows:

63-22     694C.050  “Association captive insurer” means a captive

63-23  insurer that only insures risks of the member organizations of an

63-24  association and the affiliated companies of those members,

63-25  including groups formed pursuant to the Product Liability Risk

63-26  Retention Act of 1981, as amended, 15 U.S.C. §§ 3901 et seq. , if:

63-27     1.  The association or the member organizations of the

63-28  association:

63-29     (a) Own, control or hold with the power to vote all the

63-30  outstanding voting securities of the association captive insurer, if

63-31  the association captive insurer is incorporated as a stock insurer;

63-32  or

63-33     (b) Have complete voting control over the captive insurer, if

63-34  the captive insurer is formed as a mutual insurer; and

63-35     2.  The member organizations of the association collectively

63-36  constitute all the subscribers of the captive insurer, if the captive

63-37  insurer is formed as a reciprocal insurer.

63-38     Sec. 80.  NRS 694C.450 is hereby amended to read as follows:

63-39     694C.450  1.  Except as otherwise provided in this section, a

63-40  captive insurer shall pay to the Division, not later than March 1 of

63-41  each year, a tax at the rate of:

63-42     (a) Two-fifths of 1 percent on the first $20,000,000 of its net

63-43  direct premiums;

63-44     (b) One-fifth of 1 percent on the next $20,000,000 of its net

63-45  direct premiums; and

64-1      (c) Seventy-five thousandths of 1 percent on each additional

64-2  dollar of its net direct premiums.

64-3      2.  Except as otherwise provided in this section, a captive

64-4  insurer shall pay to the Division, not later than March 1 of each

64-5  year, a tax at a rate of:

64-6      (a) Two hundred twenty-five thousandths of 1 percent on the

64-7  first $20,000,000 of revenue from assumed reinsurance premiums;

64-8      (b) One hundred fifty thousandths of 1 percent on the next

64-9  $20,000,000 of revenue from assumed reinsurance premiums; and

64-10     (c) Twenty-five thousandths of 1 percent on each additional

64-11  dollar of revenue from assumed reinsurance premiums.

64-12  The tax on reinsurance premiums pursuant to this subsection must

64-13  not be levied on premiums for risks or portions of risks which are

64-14  subject to taxation on a direct basis pursuant to subsection 1. A

64-15  captive insurer is not required to pay any reinsurance premium tax

64-16  pursuant to this subsection on revenue related to the receipt of assets

64-17  by the captive insurer in exchange for the assumption of loss

64-18  reserves and other liabilities of another insurer that is under

64-19  common ownership and control with the captive insurer, if the

64-20  transaction is part of a plan to discontinue the operation of the other

64-21  insurer and the intent of the parties to the transaction is to renew or

64-22  maintain such business with the captive insurer.

64-23     3.  If the sum of the taxes to be paid by a captive insurer

64-24  calculated pursuant to subsections 1 and 2 is less than $5,000 in any

64-25  given year, the captive insurer shall pay a tax of $5,000 for that

64-26  year.

64-27     4.  Two or more captive insurers under common ownership and

64-28  control must be taxed as if they were a single captive insurer.

64-29     5.  Notwithstanding any specific statute to the contrary and

64-30  except as otherwise provided in this subsection, the tax provided for

64-31  by this section constitutes all the taxes collectible pursuant to the

64-32  laws of this state from a captive insurer, and no occupation tax or

64-33  other taxes may be levied or collected from a captive insurer by this

64-34  state or by any county, city or municipality within this state, except

64-35  for ad valorem taxes on real or personal property located in this state

64-36  used in the production of income by the captive insurer.

64-37     6.  Ten percent of the revenues collected from the tax imposed

64-38  pursuant to this section must be deposited with the State Treasurer

64-39  for credit to the Account for the Regulation and Supervision of

64-40  Captive Insurers created pursuant to NRS 694C.460. The remaining

64-41  90 percent of the revenues collected must be deposited with the

64-42  State Treasurer for credit to the State General Fund.

64-43     7.  A captive insurer that is issued a license pursuant to this

64-44  chapter after July 1, 2003, is entitled to receive a nonrefundable

64-45  credit of $5,000 applied against the aggregate taxes owed by the

65-1  captive insurer for the first year in which the captive insurer

65-2  incurs any liability for the payment of taxes pursuant to this

65-3  section. A captive insurer is entitled to a nonrefundable credit

65-4  pursuant to this section not more than once after the captive

65-5  insurer is initially licensed pursuant to this chapter.

65-6      8.  As used in this section, unless the context otherwise

65-7  requires:

65-8      (a) “Common ownership and control” means:

65-9          (1) In the case of a stock insurer, the direct or indirect

65-10  ownership of 80 percent or more of the outstanding voting stock of

65-11  two or more corporations by the same member or members.

65-12         (2) In the case of a mutual insurer, the direct or indirect

65-13  ownership of 80 percent or more of the surplus and the voting power

65-14  of two or more corporations by the same member or members.

65-15     (b) “Net direct premiums” means the direct premiums collected

65-16  or contracted for on policies or contracts of insurance written by a

65-17  captive insurer during the preceding calendar year, less the amounts

65-18  paid to policyholders as return premiums, including dividends on

65-19  unabsorbed premiums or premium deposits returned or credited to

65-20  policyholders.

65-21     Sec. 80.5. NRS 695C.055 is hereby amended to read as

65-22  follows:

65-23     695C.055  1.  The provisions of NRS 449.465, 679B.700,

65-24  subsections 2, 4, 18, 19 and 32 of NRS 680B.010, NRS [680B.025]

65-25  680B.020 to 680B.060, inclusive, and chapter 695G of NRS apply

65-26  to a health maintenance organization.

65-27     2.  For the purposes of subsection 1, unless the context requires

65-28  that a provision apply only to insurers, any reference in those

65-29  sections to “insurer” must be replaced by “health maintenance

65-30  organization.”

65-31     Sec. 81.  NRS 696B.415 is hereby amended to read as follows:

65-32     696B.415  1.  Upon the issuance of an order of liquidation

65-33  with a finding of insolvency against a domestic insurer, the

65-34  Commissioner shall apply to the district court for authority to

65-35  disburse money to the Nevada Insurance Guaranty Association or

65-36  the Nevada Life and Health Insurance Guaranty Association out of

65-37  the marshaled assets of the insurer, as money becomes available, in

65-38  amounts equal to disbursements made or to be made by the

65-39  Association for claims-handling expense and covered-claims

65-40  obligations upon the presentation of evidence that disbursements

65-41  have been made by the Association. The Commissioner shall apply

65-42  to the district court for authority to make similar disbursements to

65-43  insurance guaranty associations in other jurisdictions if one of the

65-44  Nevada Associations is entitled to like payment pursuant to the laws

66-1  relating to insolvent insurers in the jurisdiction in which the

66-2  organization is domiciled.

66-3      2.  The Commissioner, in determining the amounts available for

66-4  disbursement to the Nevada Insurance Guaranty Association, the

66-5  Nevada Life and Health Insurance Guaranty Association[,] and

66-6  similar organizations in other jurisdictions, shall reserve sufficient

66-7  assets for the payment of the expenses of administration.

66-8      3.  The Commissioner shall establish procedures for the ratable

66-9  allocation of disbursements to the Nevada Insurance Guaranty

66-10  Association, the Nevada Life and Health Insurance Guaranty

66-11  Association[,] and similar organizations in other jurisdictions, and

66-12  shall secure from each organization to which money is paid as a

66-13  condition to advances in reimbursement of covered-claims

66-14  obligations an agreement to return to the Commissioner, on demand,

66-15  amounts previously advanced which are required to pay claims of

66-16  secured creditors and claims falling within the priorities established

66-17  in paragraph (a) or (b) of subsection 1 of NRS 696B.420.

66-18     4.  The Commissioner, as receiver for an insolvent insurer,

66-19  may file a claim on behalf of all insureds for any unearned

66-20  premiums. The Nevada Insurance Guaranty Association, the

66-21  Nevada Life and Health Insurance Guaranty Association and

66-22  similar organizations in other jurisdictions shall accept the claim

66-23  in lieu of requiring each insured to file a claim for the unearned

66-24  premium.

66-25     Sec. 82.  NRS 696B.420 is hereby amended to read as follows:

66-26     696B.420  1.  The order of distribution of claims from the

66-27  estate of the insurer on liquidation of the insurer must be as set forth

66-28  in this section. Each claim in each class must be paid in full or

66-29  adequate money retained for the payment before the members of the

66-30  next class receive any payment. No subclasses may be established

66-31  within any class. Except as otherwise provided in subsection 2, the

66-32  order of distribution and of priority must be as follows:

66-33     (a) Administration costs and expenses, including, but not limited

66-34  to, the following:

66-35         (1) The actual and necessary costs of preserving or

66-36  recovering the assets of the insurer;

66-37         (2) Compensation for any services rendered in the

66-38  liquidation;

66-39         (3) Any necessary filing fees;

66-40         (4) The fees and mileage payable to witnesses; and

66-41         (5) Reasonable attorney’s fees.

66-42     (b) [Loss claims, including any] All claims under policies , [for

66-43  losses incurred, including third-party claims,] any claims against

66-44  [the insurer]an insured for liability for bodily injury or for injury to

66-45  or destruction of tangible property which are [not]covered claims

67-1  under policies, including any such claims of the Federal

67-2  Government or any state or local government, and any claims of

67-3  the Nevada Insurance Guaranty Association, the Nevada Life and

67-4  Health Insurance Guaranty Association[,] and other similar

67-5  statutory organizations in other jurisdictions. Any claims under life

67-6  insurance and annuity policies, whether for death proceeds, annuity

67-7  proceeds or investment values, must be treated as loss claims. That

67-8  portion of any loss for which indemnification is provided by other

67-9  benefits or advantages recovered or recoverable by the claimant may

67-10  not be included in this class, other than benefits or advantages

67-11  recovered or recoverable in discharge of familial obligations of

67-12  support or because of succession at death or as proceeds of life

67-13  insurance, or as gratuities. No payment made by an employer to his

67-14  employee may be treated as a gratuity.

67-15     (c) Unearned premiums and small loss claims, including claims

67-16  under nonassessable policies for unearned premiums or other

67-17  premium refunds.

67-18     (d) [Claims]Except as otherwise provided in paragraph (b),

67-19  claims of the Federal Government.

67-20     (e) [Claims]Except as otherwise provided in paragraph (b),

67-21  claims of any state or local government, including, but not limited

67-22  to, a claim of a state or local government for a penalty or forfeiture.

67-23     (f) Wage debts due employees for services performed, not to

67-24  exceed [$1,000 to]an amount equal to 2 months of monetary

67-25  compensation for each employee[, that have been earned]for

67-26  services performed within 6 months before the filing of the petition

67-27  for liquidation or, if rehabilitation preceded liquidation, within 1

67-28  year before the filing of the petition for [liquidation.]rehabilitation.

67-29  Officers of the insurer are not entitled to the benefit of this priority.

67-30  The priority set forth in this paragraph must be in lieu of any other

67-31  similar priority authorized by law as to wages or compensation of

67-32  employees.

67-33     (g) Residual classification, including any other claims not

67-34  falling within other classes pursuant to the provisions of this section.

67-35  Claims for a penalty or forfeiture must be allowed in this class only

67-36  to the extent of the pecuniary loss sustained from the act, transaction

67-37  or proceeding out of which the penalty or forfeiture arose, with

67-38  reasonable and actual costs occasioned thereby. The remainder of

67-39  the claims must be postponed to the class of claims specified in

67-40  paragraph (j).

67-41     (h) Judgment claims based solely on judgments. If a claimant

67-42  files a claim and bases the claim on the judgment and on the

67-43  underlying facts, the claim must be considered by the liquidator,

67-44  who shall give the judgment such weight as he deems appropriate.

67-45  The claim as allowed must receive the priority it would receive in

68-1  the absence of the judgment. If the judgment is larger than the

68-2  allowance on the underlying claim, the remaining portion of the

68-3  judgment must be treated as if it were a claim based solely on a

68-4  judgment.

68-5      (i) Interest on claims already paid, which must be calculated at

68-6  the legal rate compounded annually on any claims in the classes

68-7  specified in paragraphs (a) to (h), inclusive, from the date of the

68-8  petition for liquidation or the date on which the claim becomes due,

68-9  whichever is later, until the date on which the dividend is declared.

68-10  The liquidator, with the approval of the court, may:

68-11         (1) Make reasonable classifications of claims for purposes of

68-12  computing interest;

68-13         (2) Make approximate computations; and

68-14         (3) Ignore certain classifications and periods as de minimis.

68-15     (j) Miscellaneous subordinated claims, with interest as provided

68-16  in paragraph (i):

68-17         (1) Claims subordinated by NRS 696B.430;

68-18         (2) Claims filed late;

68-19         (3) Portions of claims subordinated pursuant to the

68-20  provisions of paragraph (g);

68-21         (4) Claims or portions of claims the payment of which is

68-22  provided by other benefits or advantages recovered or recoverable

68-23  by the claimant; and

68-24         (5) Claims not otherwise provided for in this section.

68-25     (k) Preferred ownership claims, including surplus or

68-26  contribution notes, or similar obligations, and premium refunds on

68-27  assessable policies. Interest at the legal rate must be added to each

68-28  claim, as provided in paragraphs (i) and (j).

68-29     (l) Proprietary claims of shareholders or other owners.

68-30     2.  If there are no existing or potential claims of the government

68-31  against the estate, claims for wages have priority over any claims set

68-32  forth in paragraphs (c) to (k), inclusive, of subsection 1. The

68-33  provisions of this subsection must not be construed to require the

68-34  accumulation of interest for claims as described in paragraph (i) of

68-35  subsection 1.

68-36     Sec. 82.5. NRS 697.270 is hereby amended to read as follows:

68-37     697.270  A bail agent shall not [become a surety] act as an

68-38  attorney-in-fact for an insurer on an undertaking unless he has

68-39  registered in the office of the sheriff and with the clerk of the district

68-40  court in which the agent resides, and he may register in the same

68-41  manner in any other county. Any bail agent shall file a certified

68-42  copy of his appointment by power of attorney from each insurer

68-43  which he represents as agent with each of such officers. The bail

68-44  agent shall register and file a certified copy of renewed power of

68-45  attorney annually on July 1. The clerk of the district court and the

69-1  sheriff shall not permit the registration of a bail agent unless the

69-2  agent is licensed by the Commissioner.

69-3      Sec. 83.  NRS 697.290 is hereby amended to read as follows:

69-4      697.290  Every bail agent must maintain in his office such

69-5  records of bail bonds, and such additional information as the

69-6  Commissioner may reasonably require, executed or countersigned

69-7  by him to enable the public to obtain all necessary information

69-8  concerning the bail bonds for at least [1 year] 3 years after the

69-9  liability of the surety has been terminated. The records must be open

69-10  to examination by the Commissioner or his representatives at all

69-11  times, and the Commissioner at any time may require the licensee to

69-12  furnish to him, in such manner or form as he requires, any

69-13  information kept or required to be kept in the records.

69-14     Sec. 83.5. NRS 697.300 is hereby amended to read as follows:

69-15     697.300  1.  A bail agent shall not, in any bail transaction or in

69-16  connection therewith, directly or indirectly, charge or collect money

69-17  or other valuable consideration from any person except for the

69-18  following purposes:

69-19     (a) To pay the premium at the rates established by the insurer, in

69-20  accordance with chapter 686B of NRS, or to pay the charges for the

69-21  bail bond filed in connection with the transaction at the rates filed in

69-22  accordance with the provisions of this Code. The rates must be [not

69-23  less than 10 percent or more than] 15 percent of the amount of the

69-24  bond or $50, whichever is greater.

69-25     (b) To provide collateral.

69-26     (c) To reimburse himself for actual expenses incurred in

69-27  connection with the transaction. Such expenses are limited to:

69-28         (1) Guard fees.

69-29         (2) Notary public fees, recording fees, expenses incurred for

69-30  necessary long distance telephone calls and charges for telegrams.

69-31         (3) Travel expenses incurred more than 25 miles from the

69-32  agent’s principal place of business. Such expenses:

69-33             (I) May be billed at the rate provided for state officers and

69-34  employees generally; and

69-35             (II) May not be charged in areas where bail agents

69-36  advertise a local telephone number.

69-37         (4) Expenses incurred to verify underwriting information.

69-38         (5) Any other actual expenditure necessary to the transaction

69-39  which is not usually and customarily incurred in connection with

69-40  bail transactions.

69-41     (d) To reimburse himself, or have a right of action against the

69-42  principal or any indemnitor, for actual expenses incurred in good

69-43  faith, by reason of breach by the defendant of any of the terms of the

69-44  written agreement under which and pursuant to which the

69-45  undertaking of bail or bail bond was written. If there is no written

70-1  agreement, or an incomplete writing, the surety may, at law, enforce

70-2  its equitable rights against the principal and his indemnitors, in

70-3  exoneration. Such reimbursement or right of action must not exceed

70-4  the principal sum of the bond or undertaking, plus any reasonable

70-5  expenses that may be verified by receipt in a total amount of not

70-6  more than the principal sum of the bond or undertaking, incurred in

70-7  good faith by the surety, its agents, licensees and employees by

70-8  reason of the principal’s breach.

70-9      2.  This section does not prevent the full and unlimited right of

70-10  a bail agent to execute undertaking of bail on behalf of a nonresident

70-11  agent of the surety he represents. The licensed resident bail agent is

70-12  entitled to a minimum countersignature fee of $5, with a maximum

70-13  countersignature fee of $100, plus expenses incurred in accordance

70-14  with paragraphs (c) and (d) of subsection 1. Such countersignature

70-15  fees may be charged in addition to the premium of the undertaking.

70-16     Sec. 84.  NRS 697.320 is hereby amended to read as follows:

70-17     697.320  1.  A bail agent may accept collateral security in

70-18  connection with a bail transaction if the collateral security is

70-19  reasonable in relation to the face amount of the bond. The bail agent

70-20  shall not transfer the collateral to any person other than a bail

70-21  agent licensed pursuant to this chapter or a surety insurer holding

70-22  a valid certificate of authority issued by the Commissioner. The

70-23  collateral must not be transported or otherwise removed from this

70-24  state. Any person who receives the collateral:

70-25     (a) Shall be deemed to hold the collateral in a fiduciary

70-26  capacity to the same extent as a bail agent; and

70-27     (b) Shall retain, return and otherwise possess the collateral in

70-28  accordance with the provisions of this chapter.

70-29     2.  The collateral security must be received by the bail agent in

70-30  his fiduciary capacity, and before any forfeiture of bail must be kept

70-31  separate and apart from any other funds or assets of the licensee.

70-32  Any collateral received must be returned to the person who

70-33  deposited it with the bail agent or any assignee other than the bail

70-34  agent as soon as the obligation, the satisfaction of which was

70-35  secured by the collateral, is discharged and all fees owed to the bail

70-36  agent have been paid. The bail agent or any surety insurer having

70-37  custody of the collateral shall, immediately after the bail agent or

70-38  surety insurer receives a request for return of the collateral from

70-39  the person who deposited the collateral, determine whether the

70-40  bail agent or surety insurer has received notice that the obligation

70-41  is discharged. If the collateral is deposited to secure the obligation

70-42  of a bond, it must be returned [within 30 days] immediately after

70-43  receipt of the request for return of the collateral and notice of the

70-44  entry of any order by an authorized official by virtue of which

70-45  liability under the bond is terminated or upon payment of all fees

71-1  owed to the bail agent, whichever is later. A certified copy of the

71-2  minute order from the court wherein the bail or undertaking was

71-3  ordered exonerated shall be deemed prima facie evidence of

71-4  exoneration or termination of liability.

71-5      3.  If a bail agent receives as collateral in a bail transaction,

71-6  whether on his or another person’s behalf, any document

71-7  conveying title to real property, the bail agent shall not accept the

71-8  document unless it indicates on its face that it is executed as part

71-9  of a security transaction. If the document is recorded, the bail

71-10  agent or any surety insurer having possession of the document

71-11  shall, immediately after the bail agent or surety insurer receives a

71-12  request for return of the collateral from the person who executed

71-13  the document:

71-14     (a) Determine whether the bail agent or surety insurer has

71-15  received notice that the obligation for which the document was

71-16  accepted is discharged; and

71-17     (b) If the obligation has been discharged, reconvey the real

71-18  property by delivering a deed or other document of conveyance to

71-19  the person or to his heirs, legal representative or successor in

71-20  interest. The deed or other document of conveyance must be

71-21  prepared in such a manner that it may be recorded.

71-22     4.  If the amount of any collateral received in a bail

71-23  transaction exceeds the amount of any bail forfeited by the

71-24  defendant for whom the collateral was accepted, the bail agent or

71-25  any surety insurer having custody of the collateral shall,

71-26  immediately after the bail is forfeited, return to the person who

71-27  deposited the collateral the amount by which the collateral exceeds

71-28  the amount of the bail forfeited. Any collateral returned to a

71-29  person pursuant to this subsection is subject to a claim for fees, if

71-30  any, owed to the bail agent returning the collateral.

71-31     5.  If a bail agent accepts collateral, he shall give a written

71-32  receipt for the collateral. The receipt must include in detail a full

71-33  account of the collateral received.

71-34     Sec. 85.  NRS 697.360 is hereby amended to read as follows:

71-35     697.360  Licensed bail agents, bail solicitors and bail

71-36  enforcement agents, and general agents are also subject to the

71-37  following provisions of this Code, to the extent reasonably

71-38  applicable:

71-39     1.  Chapter 679A of NRS.

71-40     2.  Chapter 679B of NRS.

71-41     3.  NRS 683A.261.

71-42     4.  NRS 683A.301.

71-43     [4.] 5. NRS 683A.311.

71-44     [5.] 6. NRS 683A.341.

71-45     [6.] 7. NRS 683A.361.

72-1      [7.] 8. NRS 683A.400.

72-2      [8.] 9. NRS 683A.451.

72-3      [9.] 10. NRS 683A.461.

72-4      [10.] 11. NRS 683A.480.

72-5      [11.] 12. NRS 683A.500.

72-6      13.  NRS 683A.520.

72-7      [12.] 14. NRS 686A.010 to 686A.310, inclusive.

72-8      Sec. 85.5. NRS 178.512 is hereby amended to read as follows:

72-9      178.512  The court shall not set aside a forfeiture unless:

72-10     1.  The surety submits an application to set it aside on the

72-11  ground that the defendant:

72-12     (a) Has appeared before the court since the date of the forfeiture

72-13  and has presented [a] :

72-14         (1) A satisfactory excuse for his absence; and

72-15         (2) Satisfactory evidence that the surety did not in any way

72-16  cause or aid the absence of the defendant;

72-17     (b) Was dead before the date of the forfeiture but the surety did

72-18  not know and could not reasonably have known of his death before

72-19  that date;

72-20     (c) Was unable to appear before the court before the date of the

72-21  forfeiture because of his illness or his insanity, but the surety did not

72-22  know and could not reasonably have known of his illness or insanity

72-23  before that date;

72-24     (d) Was unable to appear before the court before the date of the

72-25  forfeiture because he was being detained by civil or military

72-26  authorities, but the surety did not know and could not reasonably

72-27  have known of his detention before that date; or

72-28     (e) Was unable to appear before the court before the date of the

72-29  forfeiture because he was deported, but the surety did not know and

72-30  could not reasonably have known of his deportation before that

72-31  date,

72-32  and the court, upon hearing the matter, determines that one or more

72-33  of the grounds described in this subsection exist and that the surety

72-34  did not in any way cause or aid the absence of the defendant; and

72-35     2.  The court determines that justice does not require the

72-36  enforcement of the forfeiture.

72-37     Sec. 86.  NRS 616B.318 is hereby amended to read as follows:

72-38     616B.318  1.  The Commissioner shall impose an

72-39  administrative fine, not to exceed $1,000 for each violation, and:

72-40     (a) Shall withdraw the certification of a self-insured employer if:

72-41         (1) The deposit required pursuant to NRS 616B.300 is not

72-42  sufficient and the employer fails to increase the deposit after he has

72-43  been ordered to do so by the Commissioner;

73-1          (2) The self-insured employer fails to provide evidence of

73-2  excess insurance pursuant to NRS 616B.300 within 45 days after he

73-3  has been so ordered; or

73-4          (3) [The] Except as otherwise provided in subsection 4, the

73-5  employer becomes insolvent, institutes any voluntary proceeding

73-6  under the Bankruptcy Act or is named in any involuntary

73-7  proceeding thereunder.

73-8      (b) May withdraw the certification of a self-insured employer if:

73-9          (1) The employer intentionally fails to comply with

73-10  regulations of the Commissioner regarding reports or other

73-11  requirements necessary to carry out the purposes of chapters 616A

73-12  to 616D, inclusive, and chapter 617 of NRS;

73-13         (2) The employer violates the provisions of subsection 2 of

73-14  NRS 616B.500 or any regulation adopted by the Commissioner or

73-15  the Administrator concerning the administration of the employer’s

73-16  plan of self-insurance; or

73-17         (3) The employer makes a general or special assignment for

73-18  the benefit of creditors or fails to pay compensation after an order

73-19  for payment of any claim becomes final.

73-20     2.  Any employer whose certification as a self-insured employer

73-21  is withdrawn must, on the effective date of the withdrawal, qualify

73-22  as an employer pursuant to NRS 616B.650.

73-23     3.  The Commissioner may, upon the written request of an

73-24  employer whose certification as a self-insured employer is

73-25  withdrawn pursuant to subparagraph (3) of paragraph (a) of

73-26  subsection 1, reinstate the employer’s certificate for a reasonable

73-27  period to allow the employer sufficient time to provide industrial

73-28  insurance for his employees.

73-29     4.  The Commissioner may authorize an employer to retain his

73-30  certification as a self-insured employer during the pendency of a

73-31  proceeding specified in subparagraph (3) of paragraph (a) of

73-32  subsection 1 if the employer establishes to the satisfaction of the

73-33  Commissioner that the employer is able to pay all claims for

73-34  compensation during the pendency of the proceeding.

73-35     Sec. 87.  NRS 616B.336 is hereby amended to read as follows:

73-36     616B.336  1.  Each self-insured employer shall furnish audited

73-37  financial statements, certified by an auditor licensed to do business

73-38  in this state, to the Commissioner [of Insurance annually.] annually

73-39  within 120 days after the expiration of the self-insured employer’s

73-40  fiscal year.

73-41     2.  The Commissioner [of Insurance] may examine the records

73-42  and interview the employees of each self-insured employer as often

73-43  as he deems advisable to determine the adequacy of the deposit

73-44  which the employer has made with the Commissioner, the

73-45  sufficiency of reserves and the reporting, handling and processing of

74-1  injuries or claims. The Commissioner shall examine the records for

74-2  that purpose at least once every 3 years. The self-insured employer

74-3  shall reimburse the Commissioner for the cost of the examination.

74-4      Sec. 88.  NRS 616B.359 is hereby amended to read as follows:

74-5      616B.359  1.  The Commissioner shall grant or deny an

74-6  application for certification as an association of self-insured public

74-7  or private employers within 60 days after receiving the application.

74-8  If the application is materially incomplete or does not comply with

74-9  the applicable provisions of the law, the Commissioner shall notify

74-10  the applicant of the additional information or changes required.

74-11  Under such circumstances, if the Commissioner is unable to act

74-12  upon the application within this 60-day period, he may extend the

74-13  period for granting or denying the application, but for not longer

74-14  than an additional 90 days.

74-15     2.  Upon determining that an association is qualified as an

74-16  association of self-insured public or private employers, the

74-17  Commissioner shall issue a certificate to that effect to the

74-18  association and the Administrator. No certificate may be issued to

74-19  an association that, within the 2 years immediately preceding its

74-20  application, has had its certification as an association of self-insured

74-21  public or private employers involuntarily withdrawn by the

74-22  Commissioner.

74-23     3.  A certificate issued pursuant to this section must include,

74-24  without limitation:

74-25     (a) The name of the association;

74-26     (b) The name of each employer who the Commissioner

74-27  determines is a member of the association at the time of the issuance

74-28  of the certificate;

74-29     (c) An identification number assigned to the association by the

74-30  Commissioner; and

74-31     (d) The date on which the certificate was issued.

74-32     4.  A certificate issued pursuant to this section remains in effect

74-33  until withdrawn by the Commissioner or cancelled at the request of

74-34  the association. Coverage for an association granted a certificate

74-35  becomes effective on the date of certification or the date specified in

74-36  the certificate.

74-37     5.  The Commissioner shall not grant a request to cancel a

74-38  certificate unless the association has insured or reinsured all

74-39  incurred obligations with an insurer authorized to do business in this

74-40  state pursuant to an agreement filed with and approved by the

74-41  Commissioner. The agreement must include coverage for actual

74-42  claims and claims [filed with the association] incurred but not

74-43  reported, and the expenses associated with those claims.

 

 

75-1      Sec. 89.  NRS 616B.386 is hereby amended to read as follows:

75-2      616B.386  1.  If an employer wishes to become a member of

75-3  an association of self-insured public or private employers, the

75-4  employer must:

75-5      (a) Submit an application for membership to the board of

75-6  trustees or third-party administrator of the association; and

75-7      (b) Enter into an indemnity agreement as required by

75-8  NRS 616B.353.

75-9      2.  The membership of the applicant becomes effective when

75-10  each member of the association approves the application or on a

75-11  later date specified by the association. The application for

75-12  membership and the action taken on the application must be

75-13  maintained as permanent records of the board of trustees.

75-14     3.  Each member who is a member of an association during the

75-15  12 months immediately following the formation of the association

75-16  must:

75-17     (a) Have a tangible net worth of at least $500,000; or

75-18     (b) Have had a reported payroll for the previous 12 months

75-19  which would have resulted in a manual premium of at least $15,000,

75-20  calculated in accordance with a manual prepared pursuant to

75-21  subsection 4 of NRS 686B.1765.

75-22     4.  An employer who seeks to become a member of the

75-23  association after the 12 months immediately following the formation

75-24  of the association must meet the requirement set forth in paragraph

75-25  (a) or (b) of subsection 3 unless the Commissioner adjusts the

75-26  requirement for membership in the association after conducting an

75-27  annual review of the actuarial solvency of the association pursuant

75-28  to subsection 1 of NRS 616B.353.

75-29     5.  An association of self-insured private employers may apply

75-30  to the Commissioner for authority to determine the amount of

75-31  tangible net worth and manual premium that an employer must have

75-32  to become a member of the association. The Commissioner shall

75-33  approve the application if the association:

75-34     (a) Has been certified to act as an association for at least the 3

75-35  consecutive years immediately preceding the date on which the

75-36  association filed the application with the Commissioner;

75-37     (b) Has a combined tangible net worth of all members in the

75-38  association of at least $5,000,000;

75-39     (c) Has at least 15 members; and

75-40     (d) Has not been required to meet informally with the

75-41  Commissioner pursuant to subsection 1 of NRS 616B.431 during

75-42  the 18-month period immediately preceding the date on which the

75-43  association filed the application with the Commissioner or, if the

75-44  association has been required to attend such a meeting during that

76-1  period, has not had its certificate withdrawn before the date on

76-2  which the association filed the application.

76-3      6.  An association of self-insured private employers may apply

76-4  to the Commissioner for authority to determine the documentation

76-5  demonstrating solvency that an employer must provide to become a

76-6  member of the association. The Commissioner shall approve the

76-7  application if the association:

76-8      (a) Has been certified to act as an association for at least the 3

76-9  consecutive years immediately preceding the date on which the

76-10  association filed the application with the Commissioner;

76-11     (b) Has a combined tangible net worth of all members in the

76-12  association of at least $5,000,000; and

76-13     (c) Has at least 15 members.

76-14     7.  The Commissioner may withdraw his approval of an

76-15  application submitted pursuant to subsection 5 or 6 if he determines

76-16  the association has ceased to comply with any of the requirements

76-17  set forth in subsection 5 or 6, as applicable.

76-18     8.  A member of an association may terminate his membership

76-19  at any time. To terminate his membership, a member must submit to

76-20  the association’s administrator a notice of intent to withdraw from

76-21  the association at least 120 days before the effective date of

76-22  withdrawal. The [association’s administrator shall, within 10 days

76-23  after receipt of the notice, notify the Commissioner of the

76-24  employer’s] notice of intent to withdraw [from the association.]

76-25  must include a statement indicating that the member has:

76-26     (a) Been certified as a self-insured employer pursuant to

76-27  NRS 616B.312;

76-28     (b) Become a member of another association of self-insured

76-29  public or private employers; or

76-30     (c) Become insured by a private carrier.

76-31     9.  The members of an association may cancel the membership

76-32  of any member of the association in accordance with the bylaws of

76-33  the association.

76-34     10.  The association shall:

76-35     (a) Within 30 days after the addition of an employer to the

76-36  membership of the association, notify the Commissioner of the

76-37  addition and:

76-38         (1) If the association has not received authority from the

76-39  Commissioner pursuant to subsection 5 or 6, as applicable, provide

76-40  to the Commissioner all information and assurances for the new

76-41  member that were required from each of the original members of the

76-42  association upon its organization; or

76-43         (2) If the association has received authority from the

76-44  Commissioner pursuant to subsection 5 or 6, as applicable, provide

76-45  to the Commissioner evidence that is satisfactory to the

77-1  Commissioner that the new member is a member or associate

77-2  member of the bona fide trade association as required pursuant to

77-3  paragraph (a) of subsection 2 of NRS 616B.350, a copy of the

77-4  indemnity agreement that jointly and severally binds the new

77-5  member, the other members of the association and the association

77-6  that is required to be executed pursuant to paragraph (a) of

77-7  subsection 1 of NRS 616B.353 and any other information the

77-8  Commissioner may reasonably require to determine whether the

77-9  amount of security deposited with the Commissioner pursuant to

77-10  paragraph (d) or (e) of subsection 1 of NRS 616B.353 is sufficient,

77-11  but such information must not exceed the information required to be

77-12  provided to the Commissioner pursuant to subparagraph (1);

77-13     (b) Notify the Commissioner and the Administrator of the

77-14  termination or cancellation of the membership of any member of the

77-15  association within 10 days after the termination or cancellation; and

77-16     (c) At the expense of the member whose membership is

77-17  terminated or cancelled, maintain coverage for that member for 30

77-18  days after a notice is given pursuant to paragraph (b), unless the

77-19  association first receives notice from the Administrator that the

77-20  member has:

77-21         (1) Been certified as a self-insured employer pursuant to

77-22  NRS 616B.312;

77-23         (2) Become a member of another association of self-insured

77-24  public or private employers; or

77-25         (3) Become insured by a private carrier.

77-26     11.  If a member of an association changes his name or form of

77-27  organization, the member remains liable for any obligations incurred

77-28  or any responsibilities imposed pursuant to chapters 616A to 617,

77-29  inclusive, of NRS under his former name or form of organization.

77-30     12.  An association is liable for the payment of any

77-31  compensation required to be paid by a member of the association

77-32  pursuant to chapters 616A to 616D, inclusive, or chapter 617 of

77-33  NRS during his period of membership. The insolvency or

77-34  bankruptcy of a member does not relieve the association of liability

77-35  for the payment of the compensation.

77-36     Sec. 90.  NRS 616B.404 is hereby amended to read as follows:

77-37     616B.404  1.  An association of self-insured public or private

77-38  employers shall file with the Commissioner an audited statement of

77-39  financial condition prepared by an independent certified public

77-40  accountant. The statement must be filed on or before [April] May 1

77-41  of each year or within [90] 120 days after the conclusion of the

77-42  association’s fiscal year[,] and must contain information for the

77-43  previous fiscal year.

77-44     2.  The statement required by subsection 1 must be in a form

77-45  prescribed by the Commissioner and include, without limitation:

78-1      (a) A statement of the reserves for:

78-2          (1) Actual claims and expenses;

78-3          (2) Claims [filed with the association] incurred but not

78-4  reported, and the expenses associated with those claims;

78-5          (3) Assessments that are due, but not paid; and

78-6          (4) Unpaid debts, which must be shown as liabilities.

78-7      (b) An actuarial opinion regarding reserves that is prepared by a

78-8  member of the American Academy of Actuaries or another

78-9  specialist in loss reserves identified in the annual statement adopted

78-10  by the National Association of Insurance Commissioners. The

78-11  actuarial opinion must include a statement of:

78-12         (1) Actual claims and the expenses associated with those

78-13  claims; and

78-14         (2) Claims [filed with the association] incurred but not

78-15  reported, and the expenses associated with those claims.

78-16     3.  The Commissioner may adopt a uniform financial reporting

78-17  system for associations of self-insured public and private employers

78-18  to ensure the accurate and complete reporting of financial

78-19  information.

78-20     4.  The Commissioner may require the filing of such other

78-21  reports as he deems necessary to carry out the provisions of this

78-22  section, including, without limitation:

78-23     (a) Audits of the payrolls of the members of an association of

78-24  self-insured public or private employers;

78-25     (b) Reports of losses; and

78-26     (c) Quarterly financial statements.

78-27     Sec. 91.  NRS 616B.413 is hereby amended to read as follows:

78-28     616B.413  1.  If the assets of an association of self-insured

78-29  public or private employers exceed the amount necessary for the

78-30  association to:

78-31     (a) Pay its obligations and administrative expenses;

78-32     (b) Carry reasonable reserves; and

78-33     (c) Provide for contingencies,

78-34  the board of trustees of the association may, after obtaining the

78-35  approval of the Commissioner, declare and distribute dividends to

78-36  the members of the association.

78-37     2.  Any dividend declared pursuant to subsection 1 must be

78-38  distributed not less than 12 months after the end of the [fiscal] fund

78-39  year.

78-40     3.  A dividend may be paid only to those members who are

78-41  members of the association for the entire [fiscal] fund year. The

78-42  payment of a dividend must not be conditioned upon the member

78-43  continuing his membership in the association after the [fiscal] fund

78-44  year.

79-1      4.  An association shall give to each prospective member of the

79-2  association a written description of its plan for distributing

79-3  dividends when he applies for membership in the association.

79-4      Sec. 92.  (Deleted by amendment.)

79-5      Sec. 93.  NRS 616B.419 is hereby amended to read as follows:

79-6      616B.419  Each association of self-insured public or private

79-7  employers shall maintain:

79-8      1.  Actuarially appropriate loss reserves. Such reserves must

79-9  include reserves for:

79-10     (a) Actual claims and the expenses associated with those claims;

79-11  and

79-12     (b) Claims [filed with the association] incurred but not reported,

79-13  and the expenses associated with those claims.

79-14     2.  Reserves for uncollected debts based on the experience of

79-15  the association or other associations.

79-16     Sec. 94.  NRS 616B.422 is hereby amended to read as follows:

79-17     616B.422  1.  If the assets of an association of self-insured

79-18  public or private employers are insufficient to make certain the

79-19  prompt payment of all compensation under chapters 616A to 617,

79-20  inclusive, of NRS and to maintain the reserves required by NRS

79-21  616B.419, the association shall immediately notify the

79-22  Commissioner of the deficiency and:

79-23     (a) Transfer any surplus acquired from a previous [fiscal] fund

79-24  year to the current [fiscal] fund year to make up the deficiency;

79-25     (b) Transfer money from its administrative account to its claims

79-26  account;

79-27     (c) Collect an additional assessment from its members in an

79-28  amount required to make up the deficiency; or

79-29     (d) Take any other action to make up the deficiency which is

79-30  approved by the Commissioner.

79-31     2.  If the association wishes to transfer any surplus from one

79-32  [fiscal] fund year to another, the association must first notify the

79-33  Commissioner of the transfer.

79-34     3.  The Commissioner shall order the association to make up

79-35  any deficiency pursuant to subsection 1 if the association fails to do

79-36  so within 30 days after notifying the Commissioner of the

79-37  deficiency. The association shall be deemed insolvent if it fails to:

79-38     (a) Collect an additional assessment from its members within 30

79-39  days after being ordered to do so by the Commissioner; or

79-40     (b) Make up the deficiency in any other manner within 60 days

79-41  after being ordered to do so by the Commissioner.

79-42     Sec. 95.  (Deleted by amendment.)

 

79-43  H