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; authorizing the Commissioner to examine the accounts, records, documents and transactions of an external review organization for certain purposes; 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.

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

2-2  information by the Commissioner pursuant to this section does not

2-3  waive any applicable privilege or claim of confidentiality in the

2-4  document, material or other information.

2-5  Sec. 2.  NRS 679B.130 is hereby amended to read as follows:

2-6  679B.130  1.  The Commissioner may adopt reasonable

2-7  regulations [for] :

2-8  (a) For the administration of any provision of this Code, NRS

2-9  287.04335 or chapters 616A to 617, inclusive, of NRS[.] ; or

2-10      (b) As required to ensure compliance by the Commissioner

2-11  with any federal law or regulation relating to insurance.

2-12      2.  A person who willfully violates any regulation of the

2-13  Commissioner is subject to such suspension or revocation of a

2-14  certificate of authority or license, or administrative fine in lieu of

2-15  such suspension or revocation, as may be applicable under this Code

2-16  or chapter 616A, 616B, 616C, 616D or 617 of NRS for violation of

2-17  the provision to which the regulation relates. No penalty applies to

2-18  any act done or omitted in good faith in conformity with any such

2-19  regulation, notwithstanding that the regulation may, after the act or

2-20  omission, be amended, rescinded or determined by a judicial or

2-21  other authority to be invalid for any reason.

2-22      Sec. 3.  NRS 679B.144 is hereby amended to read as follows:

2-23      679B.144  1.  The Commissioner shall collect and maintain

2-24  the information provided by insurers pursuant to NRS 690B.050

2-25  regarding each closed claim for medical malpractice filed against

2-26  [physicians and surgeons] a person who is covered by a policy of

2-27  insurance for medical malpractice in this state, including, without

2-28  limitation:

2-29      (a) The cause of the loss;

2-30      (b) A description of the injury for which the claim was filed;

2-31      (c) The sex of the injured person;

2-32      (d) The names and number of defendants in each claim;

2-33      (e) The type of coverage provided;

2-34      (f) The amount of the initial, highest and last reserves of an

2-35  insurer for each claim before final resolution of the claim by

2-36  settlement or trial;

2-37      (g) The disposition of each claim;

2-38      (h) The amount of money awarded through settlement or by

2-39  verdict;

2-40      (i) The sum of money paid to each claimant and the source of

2-41  that sum; [and]

2-42      (j) Any sum of money allocated to expenses for the adjustment

2-43  of losses[.] ; and

2-44      (k) Any other information the Commissioner determines to be

2-45  necessary or appropriate.

3-1  2.  The Commissioner shall submit with his report to the

3-2  Legislature required pursuant to NRS 679B.410[,] a summary of

3-3  the information collected pursuant to this section.

3-4  3.  The Commissioner shall adopt regulations necessary to carry

3-5  out the provisions of this section.

3-6  4.  As used in this section, “policy of insurance for medical

3-7  malpractice” means a policy that provides coverage for any

3-8  medical professional liability of the insured under the policy.

3-9  Sec. 3.3.  NRS 679B.240 is hereby amended to read as follows:

3-10      679B.240  To ascertain compliance with law, or relationships

3-11  and transactions between any person and any insurer or proposed

3-12  insurer, the Commissioner may, as often as he deems advisable,

3-13  examine the accounts, records, documents and transactions relating

3-14  to such compliance or relationships of:

3-15      1.  Any insurance agent, solicitor, broker, surplus lines broker,

3-16  general agent, adjuster, insurer representative, bail agent, motor club

3-17  agent or any other licensee or any other person the Commissioner

3-18  has reason to believe may be acting as or holding himself out as any

3-19  of the foregoing.

3-20      2.  Any person having a contract under which he enjoys in fact

3-21  the exclusive or dominant right to manage or control an insurer.

3-22      3.  Any insurance holding company or other person holding the

3-23  shares of voting stock or the proxies of policyholders of a domestic

3-24  insurer, to control the management thereof, as voting trustee or

3-25  otherwise.

3-26      4.  Any subsidiary of the insurer.

3-27      5.  Any person engaged in this state in, or proposing to be

3-28  engaged in this state in, or holding himself out in this state as so

3-29  engaging or proposing, or in this state assisting in, the promotion,

3-30  formation or financing of an insurer or insurance holding

3-31  corporation, or corporation or other group to finance an insurer or

3-32  the production of its business.

3-33      6.  Any external review organization, as defined in section 19

3-34  of Assembly Bill No. 79 of this session.

3-35      Sec. 3.7. NRS 679B.290 is hereby amended to read as follows:

3-36      679B.290  1.  Except as otherwise provided in subsection 2:

3-37      (a) The expense of examination of an insurer, or of any person

3-38  referred to in subsection 1, 2 , [or] 5 or 6 of NRS 679B.240, must be

3-39  borne by the person examined. Such expense includes only the

3-40  reasonable and proper hotel and travel expenses of the

3-41  Commissioner and his examiners and assistants, including expert

3-42  assistance, reasonable compensation as to such examiners and

3-43  assistants and incidental expenses as necessarily incurred in the

3-44  examination. As to expense and compensation involved in any such

3-45  examination the Commissioner shall give due consideration to

4-1  scales and limitations recommended by the National Association of

4-2  Insurance Commissioners and outlined in the examination manual

4-3  sponsored by that association.

4-4  (b) The person examined shall promptly pay to the

4-5  Commissioner the expenses of the examination upon presentation

4-6  by the Commissioner of a reasonably detailed written statement

4-7  thereof.

4-8  2.  The Commissioner may bill an insurer for the examination

4-9  of any person referred to in subsection 1 of NRS 679B.240 and shall

4-10  adopt regulations governing such billings.

4-11      Sec. 4.  NRS 679B.440 is hereby amended to read as follows:

4-12      679B.440  1.  The Commissioner may require that reports

4-13  submitted pursuant to NRS 679B.430 include, without limitation,

4-14  information regarding:

4-15      (a) Liability insurance provided to:

4-16          (1) Governmental agencies and political subdivisions of this

4-17  state, reported separately for:

4-18             (I) Cities and towns;

4-19             (II) School districts; and

4-20             (III) Other political subdivisions;

4-21          (2) Public officers;

4-22          (3) Establishments where alcoholic beverages are sold;

4-23          (4) Facilities for the care of children;

4-24          (5) Labor, fraternal or religious organizations; and

4-25          (6) Officers or directors of organizations formed pursuant to

4-26  title 7 of NRS, reported separately for nonprofit entities and entities

4-27  organized for profit;

4-28      (b) Liability insurance for:

4-29          (1) Defective products;

4-30          (2) Medical or dental malpractice [;] of:

4-31             (I)  A practitioner licensed pursuant to chapter 630,

4-32  630A, 631, 632, 633, 634, 634A, 635, 636, 637, 637A, 637B, 639 or

4-33  640 of NRS;

4-34             (II)  A hospital or other health care facility; or

4-35             (III) Any related corporate entity.

4-36          (3) Malpractice of attorneys;

4-37          (4) Malpractice of architects and engineers; and

4-38          (5) Errors and omissions by other professionally qualified

4-39  persons;

4-40      (c) Vehicle insurance, reported separately for:

4-41          (1) Private vehicles;

4-42          (2) Commercial vehicles;

4-43          (3) Liability insurance; and

4-44          (4) Insurance for property damage; [and]

4-45      (d) Workers’ compensation insurance[.] ; and

5-1  (e) In addition to any information provided pursuant to

5-2  subparagraph (2) of paragraph (b) or NRS 690B.050, a policy of

5-3  insurance for medical malpractice. As used in this paragraph,

5-4  “policy of insurance for medical malpractice” has the meaning

5-5  ascribed to it in NRS 679B.144.

5-6  2.  The Commissioner may require that the report include,

5-7  without limitation, information specifically pertaining to this state or

5-8  to an insurer in its entirety, in the aggregate or by type of insurance,

5-9  and for a previous or current year, regarding:

5-10      (a) Premiums directly written;

5-11      (b) Premiums directly earned;

5-12      (c) Number of policies issued;

5-13      (d) Net investment income, using appropriate estimates when

5-14  necessary;

5-15      (e) Losses paid;

5-16      (f) Losses incurred;

5-17      (g) Loss reserves, including:

5-18          (1) Losses unpaid on reported claims; and

5-19          (2) Losses unpaid on incurred but not reported claims;

5-20      (h) Number of claims, including:

5-21          (1) Claims paid; and

5-22          (2) Claims that have arisen but are unpaid;

5-23      (i) Expenses for adjustment of losses, including allocated and

5-24  unallocated losses;

5-25      (j) Net underwriting gain or loss;

5-26      (k) Net operation gain or loss, including net investment income;

5-27  and

5-28      (l) Any other information requested by the Commissioner.

5-29      3.  The Commissioner may also obtain, based upon an insurer

5-30  in its entirety, information regarding:

5-31      (a) Recoverable federal income tax;

5-32      (b) Net unrealized capital gain or loss; and

5-33      (c) All other expenses not included in subsection 2.

5-34      Sec. 5.  NRS 679B.460 is hereby amended to read as follows:

5-35      679B.460  1.  An insurer who willfully or repeatedly violates

5-36  or fails to comply with a provision of NRS 679B.400 to 679B.450,

5-37  inclusive, or 690B.050 or a regulation adopted pursuant to NRS

5-38  679B.430 is subject, after notice and a hearing held pursuant to NRS

5-39  679B.310 to 679B.370, inclusive, to payment of an administrative

5-40  fine of not more than $1,000 for each day of the violation or failure

5-41  to comply, up to a maximum fine of $50,000.

5-42      2.  An insurer who fails or refuses to comply with an order

5-43  issued by the Commissioner pursuant to NRS 679B.430 is subject,

5-44  after notice and a hearing held pursuant to NRS 679B.310 to

6-1  679B.370, inclusive, to suspension or revocation of his certificate of

6-2  authority to transact insurance in this state.

6-3  3.  The imposition of an administrative fine pursuant to this

6-4  section must not be considered by the Commissioner in any other

6-5  administrative proceeding unless the fine has been paid or a court

6-6  order for payment of the fine has become final.

6-7  Sec. 6.  NRS 680A.270 is hereby amended to read as follows:

6-8  680A.270  1.  Each authorized insurer shall annually on or

6-9  before March 1, or within any reasonable extension of time therefor

6-10  which the Commissioner for good cause may have granted on or

6-11  before that date, file with the Commissioner a full and true

6-12  statement of its financial condition, transactions and affairs as of

6-13  December 31 preceding. The statement must be [in] :

6-14      (a) In the general form and context of, and require information

6-15  as called for by, [the form of] an annual statement as is currently in

6-16  general and customary use in the United States for the type of

6-17  insurer and kinds of insurance to be reported upon, with any useful

6-18  or necessary modification or adaptation thereof, supplemented by

6-19  additional information required by the Commissioner[. The

6-20  statement must be verified] ;

6-21      (b) Prepared in accordance with:

6-22          (1) The Annual Statement Instructions for the type of

6-23  insurer to be reported on as adopted by the National Association

6-24  of Insurance Commissioners for the year in which the insurer files

6-25  the statement; and

6-26          (2) The Accounting Practices and Procedures Manual

6-27  adopted by the National Association of Insurance Commissioners

6-28  and effective on January 1, 2001, and as amended by the National

6-29  Association of Insurance Commissioners after that date; and

6-30      (c) Verified by the oath of the insurer’s president or vice

6-31  president and secretary or actuary, as applicable, or, in the absence

6-32  of the foregoing, by two other principal officers, or if a reciprocal

6-33  insurer, by the oath of the attorney-in-fact, or its like officers if a

6-34  corporation.

6-35      2.  The statement of an alien insurer must be verified by its

6-36  United States manager or other officer [duly authorized,] who is

6-37  authorized to do so, and may relate only to the insurer’s transactions

6-38  and affairs in the United States unless the Commissioner requires

6-39  otherwise. If the Commissioner requires a statement as to [such an]

6-40  the insurer’s affairs throughout the world, the insurer shall file the

6-41  statement with the Commissioner as soon as reasonably possible.

6-42      3.  The Commissioner may refuse to continue, or may suspend

6-43  or revoke, the certificate of authority of any insurer failing to file its

6-44  annual statement when due.

7-1  4.  At the time of filing, the insurer shall pay the fee for filing

7-2  its annual statement as prescribed by NRS 680B.010.

7-3  5.  The Commissioner may adopt regulations requiring each

7-4  domestic, foreign and alien insurer which is authorized to transact

7-5  insurance in this state to file the insurer’s annual statement with the

7-6  National Association of Insurance Commissioners or its successor

7-7  organization.

7-8  6.  All ratios of financial analyses and synopses of examinations

7-9  concerning insurers that are submitted to the Division by the

7-10  National Association of Insurance Commissioners’ Insurance

7-11  Regulatory Information System are confidential and may not be

7-12  disclosed by the Division.

7-13      Sec. 7.  NRS 680B.010 is hereby amended to read as follows:

7-14      680B.010  The Commissioner shall collect in advance and

7-15  receipt for, and persons so served must pay to the Commissioner,

7-16  fees and miscellaneous charges as follows:

7-17      1.  Insurer’s certificate of authority:

7-18      (a) Filing initial application.............. $2,450

7-19      (b) Issuance of certificate:

7-20          (1) For any one kind of insurance as defined in NRS

7-21  681A.010 to 681A.080, inclusive............. 283

7-22          (2) For two or more kinds of insurance as so defined    578

7-23          (3) For a reinsurer........................... 2,450

7-24      (c) Each annual continuation of a certificate.. 2,450

7-25      (d) Reinstatement pursuant to NRS 680A.180, 50

7-26  percent of the annual continuation fee otherwise required.

7-27      (e) Registration of additional title pursuant to NRS

7-28  680A.240...................................................... 50

7-29      (f) Annual renewal of the registration of additional title

7-30  pursuant to NRS 680A.240......................... 25

7-31      2.  Charter documents, other than those filed with an

7-32  application for a certificate of authority. Filing amendments

7-33  to articles of incorporation, charter, bylaws, power of

7-34  attorney and other constituent documents of the insurer,

7-35  each document............................................ $10

7-36      3.  Annual statement or report. For filing annual

7-37  statement or report...................................... $25

7-38      4.  Service of process:

7-39      (a) Filing of power of attorney................. $5

7-40      (b) Acceptance of service of process........ 30

7-41      5.  Licenses, appointments and renewals for producers

7-42  of insurance:

7-43      (a) Application and license................... $125

7-44      (b) Appointment fee for each insurer....... 15

7-45      (c) Triennial renewal of each license..... 125

8-1  (d) Temporary license................................. $10

8-2  (e) Modification of an existing license........ 50

8-3  6.  Surplus lines brokers:

8-4  (a) Application and license ..................... $ 125

8-5  (b) Triennial renewal of each license......... 125

8-6  7.  Managing general agents’ licenses, appointments

8-7  and renewals:

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

8-9  (b) Appointment fee for each insurer........... 15

8-10      (c) Triennial renewal of each license..... 125

8-11      8.  Adjusters’ licenses and renewals:

8-12      (a) Independent and public adjusters:

8-13          (1) Application and license ............. $125

8-14          (2) Triennial renewal of each license. 125

8-15      (b) Associate adjusters:

8-16          (1) Application and license ................ 125

8-17          (2) Triennial renewal of each license. 125

8-18      9.  Licenses and renewals for appraisers of physical

8-19  damage to motor vehicles:

8-20      (a) Application and license .................. $125

8-21      (b) Triennial renewal of each license..... 125

8-22      10.  Additional title and property insurers pursuant to

8-23  NRS 680A.240:

8-24      (a) Original registration.......................... $50

8-25      (b) Annual renewal.................................... 25

8-26      11.  Insurance vending machines:

8-27      (a) Application and license, for each machine  $125

8-28      (b) Triennial renewal of each license..... 125

8-29      12.  Permit for solicitation for securities:

8-30      (a) Application for permit.................... $100

8-31      (b) Extension of permit............................. 50

8-32      13.  Securities salesmen for domestic insurers:

8-33      (a) Application and license .................... $25

8-34      (b) Annual renewal of license................... 15

8-35      14.  Rating organizations:

8-36      (a) Application and license .................. $500

8-37      (b) Annual renewal................................. 500

8-38      15.  Certificates and renewals for administrators

8-39  licensed pursuant to chapter 683A of NRS:

8-40      (a) Application and certificate of registration $125

8-41      (b) Triennial renewal.............................. 125

8-42      16.  For copies of the insurance laws of Nevada, a fee

8-43  which is not less than the cost of producing the copies.

8-44      17.  Certified copies of certificates of authority and

8-45  licenses issued pursuant to the Insurance Code   $10

9-1  18.  For copies and amendments of documents on file

9-2  in the Division, a reasonable charge fixed by the

9-3  Commissioner, including charges for duplicating or

9-4  amending the forms and for certifying the copies and

9-5  affixing the official seal.

9-6  19.  Letter of clearance for a producer of insurance or

9-7  other licensee[,] if requested by someone other than the

9-8  licensee......................................................... $10

9-9  20.  Certificate of status as a producer of insurance or

9-10  other licensee[,] if requested by someone other than the

9-11  licensee........................................................ $10

9-12      21.  Licenses, appointments and renewals for bail

9-13  agents:

9-14      (a) Application and license .................. $125

9-15      (b) Appointment for each surety insurer.. 15

9-16      (c) Triennial renewal of each license..... 125

9-17      22.  Licenses and renewals for bail enforcement agents:

9-18      (a) Application and license .................. $125

9-19      (b) Triennial renewal of each license..... 125

9-20      23.  Licenses, appointments and renewals for general

9-21  agents for bail:

9-22      (a) Application and license .................. $125

9-23      (b) Initial appointment by each insurer.... 15

9-24      (c) Triennial renewal of each license..... 125

9-25      24.  Licenses and renewals for bail solicitors:

9-26      (a) Application and license................... $125

9-27      (b) Triennial renewal of each license..... 125

9-28      25.  Licenses and renewals for title agents and escrow

9-29  officers:

9-30      (a) Application and license .................. $125

9-31      (b) Triennial renewal of each license..... 125

9-32      (c) Appointment fee for each title insurer15

9-33      (d) Change in name or location of business or in

9-34  association..................................................... 10

9-35      26.  Certificate of authority and renewal for a seller of

9-36  prepaid funeral contracts.......................... $125

9-37      27.  Licenses and renewals for agents for prepaid

9-38  funeral contracts:

9-39      (a) Application and license .................. $125

9-40      (b) Triennial renewal of each license..... 125

9-41      28.  Licenses, appointments and renewals for agents for

9-42  fraternal benefit societies:

9-43      (a) Application and license .................. $125

9-44      (b) Appointment for each insurer............. 15

9-45      (c) Triennial renewal of each license..... 125

10-1      29.  Reinsurance intermediary broker or manager:

10-2      (a) Application and license................... $125

10-3      (b) Triennial renewal of each license..... 125

10-4      30.  Agents for and sellers of prepaid burial contracts:

10-5      (a) Application and certificate or license$125

10-6      (b) Triennial renewal.............................. 125

10-7      31.  Risk retention groups:

10-8      (a) Initial registration and review of an application$2,450

10-9      (b) Each annual continuation of a certificate of

10-10  registration.............................................. 2,450

10-11     32.  Required filing of forms:

10-12     (a) For rates and policies........................ $25

10-13     (b) For riders and endorsements............... 10

10-14     33.  Viatical settlements:

10-15     (a) Provider of viatical settlements:

10-16         (1) Application and license........... $1,000

10-17         (2) Annual renewal.......................... 1,000

10-18     (b) Broker of viatical settlements:

10-19         (1) Application and license................. 500

10-20         (2) Annual renewal............................. 500

10-21     34.  Insurance consultants:

10-22     (a) Application and license................... $125

10-23     (b) Triennial renewal.............................. 125

10-24     35.  Licensee’s association with or appointment or

10-25  sponsorship by an organization:

10-26     (a) Initial appointment, association or sponsorship, for

10-27  each organization....................................... $50

10-28     (b) Renewal of each association or sponsorship  50

10-29     (c) Annual renewal of appointment.......... 15

10-30     36.  Purchasing groups:

10-31     (a) Initial registration and review of an application  $100

10-32     (b) Each annual continuation of registration  100

10-33     Sec. 8.  NRS 680B.070 is hereby amended to read as follows:

10-34     680B.070  1.  Each authorized insurer, fraternal benefit

10-35  society, health maintenance organization, organization for dental

10-36  care , prepaid limited health service organization and motor club

10-37  shall on or before March 1 of each year pay to the Commissioner

10-38  [the] a reasonable uniform amount, not to exceed [$15,] $30, as the

10-39  Commissioner requires, to cover the assessment levied upon this

10-40  state in the same calendar year by the National Association of

10-41  Insurance Commissioners to defray:

10-42     (a) The general expenses of the Association; and

10-43     (b) Reasonable and necessary travel and related expenses

10-44  incurred by the Commissioner and members of his staff, without

10-45  limitation as to number, in attending meetings of the Association

11-1  and its committees, subcommittees, hearings and other official

11-2  activities.

11-3  The Commissioner shall give written notice of the required amount.

11-4      2.  Expenses incurred for the purposes described in paragraphs

11-5  (a) and (b) of subsection 1 must be paid in full and are not subject to

11-6  the limitations expressed in NRS 281.160 or in the regulations of

11-7  any state agency.

11-8      3.  All money received by the Commissioner pursuant to

11-9  subsection 1 must be deposited in the State Treasury for credit to the

11-10  National Association Account of the Division of Insurance, which is

11-11  hereby created in the State General Fund. Except as otherwise

11-12  provided in subsection 2, all claims against the Account must be

11-13  paid as other claims against the State are paid.

11-14     Sec. 9.  NRS 681A.160 is hereby amended to read as follows:

11-15     681A.160  1.  Except as otherwise provided in subsection 2,

11-16  credit must be allowed if reinsurance is ceded to an assuming

11-17  insurer which is accredited as a reinsurer in this state. An accredited

11-18  reinsurer is one which:

11-19     (a) Files with the Commissioner an executed form approved by

11-20  the Commissioner as evidence of its submission to this state’s

11-21  jurisdiction;

11-22     (b) Submits to this state’s authority to examine its books and

11-23  records;

11-24     (c) [Is] Files with the Commissioner a certified copy of a

11-25  certificate of authority or other evidence approved by the

11-26  Commissioner indicating that it is licensed to transact insurance or

11-27  reinsurance in at least one state, or in the case of a branch in the

11-28  United States of an alien assuming insurer is entered through and

11-29  licensed to transact insurance or reinsurance in at least one state;

11-30     (d) Files annually with the Commissioner a copy of its annual

11-31  statement filed with the Division of its state of domicile or entry and

11-32  a copy of its most recent audited financial statement; and

11-33     (e) Maintains a surplus as regards policyholders in an amount

11-34  which is not less than $20,000,000 and whose accreditation:

11-35         (1) Has not been denied by the Commissioner within 90 days

11-36  after its submission; or

11-37         (2) Has been approved by the Commissioner.

11-38     2.  No credit may be allowed for a domestic ceding insurer if

11-39  the assuming insurer’s accreditation has been revoked by the

11-40  Commissioner after notice and a hearing.

11-41     Sec. 10.  NRS 681A.180 is hereby amended to read as follows:

11-42     681A.180  1.  [Credit] Except as otherwise provided in

11-43  subsection 4, credit must be allowed if reinsurance is ceded to an

11-44  assuming insurer which maintains a trust fund in a qualified

11-45  financial institution in the United States for the payment of the valid

12-1  claims of its policyholders and ceding insurers in the United States,

12-2  their assigns and successors in interest. The assuming insurer shall

12-3  report annually to the Commissioner information substantially the

12-4  same as that required to be reported on the National Association of

12-5  Insurance Commissioners’ form of annual statement by licensed

12-6  insurers to enable the Commissioner to determine the sufficiency of

12-7  the trust fund.

12-8      2.  In the case of a single assuming insurer, the trust must

12-9  consist of an account in trust equal to the assuming insurer’s

12-10  liabilities attributable to business written in the United States and

12-11  the assuming insurer shall maintain a surplus in trust of not less than

12-12  $20,000,000.

12-13     3.  In the case of a group of incorporated and individual

12-14  unincorporated underwriters, the trust must consist of an account in

12-15  trust equal to the group’s liabilities attributable to business written

12-16  in the United States and the group shall maintain a surplus in trust of

12-17  which $100,000,000 must be held jointly for the benefit of ceding

12-18  insurers in the United States to any member of the group, and the

12-19  group shall make available to the Commissioner an annual

12-20  certification of the solvency of each underwriter by the group’s

12-21  domiciliary regulator and its independent public accountants.

12-22     4.  If the assuming insurer does not meet the requirements of

12-23  NRS 681A.110, 681A.160 or 681A.170, credit must not be allowed

12-24  unless the assuming insurer has agreed to the following

12-25  conditions set forth in the trust agreement:

12-26     (a) Notwithstanding any provision to the contrary in the trust

12-27  instrument, if the trust fund consists of an amount that is less than

12-28  the amount required pursuant to this section, or if the grantor of

12-29  the trust fund is declared to be insolvent or placed into

12-30  receivership, rehabilitation, liquidation or a similar proceeding in

12-31  accordance with the laws of the grantor’s state or country of

12-32  domicile, the trustee of the trust fund must comply with an order

12-33  of the commissioner of insurance or other appropriate person with

12-34  regulatory authority over the trust fund in that state or country or

12-35  a court of competent jurisdiction requiring the trustee to transfer

12-36  to that commissioner or person all the assets of the trust fund;

12-37     (b) The assets of the trust fund must be distributed by and

12-38  claims filed with and valued by the commissioner of insurance or

12-39  other appropriate person with regulatory authority over the trust

12-40  fund in accordance with the laws of the state in which the trust

12-41  fund is domiciled that are applicable to the liquidation of domestic

12-42  insurers in that state;

12-43     (c) If the commissioner of insurance or other appropriate

12-44  person with regulatory authority over the trust fund determines

12-45  that the assets of the trust fund or any portion of the trust fund are

13-1  not required to satisfy any claim of any ceding insurer of the

13-2  grantor of the trust fund in the United States, the assets must be

13-3  returned by that commissioner or person to the trustee of the trust

13-4  fund for distribution in accordance with the trust agreement; and

13-5      (d) The grantor of the trust must waive any right that:

13-6          (1) Is otherwise available to him under the laws of the

13-7  United States; and

13-8          (2) Is inconsistent with the provisions of this subsection.

13-9      Sec. 11.  NRS 681A.190 is hereby amended to read as follows:

13-10     681A.190  1.  Credit must be allowed if reinsurance is ceded

13-11  to a group of incorporated insurers under common administration

13-12  which:

13-13     (a) Does not engage in any business other than underwriting

13-14  as a member of the group;

13-15     (b) Is subject to the same amount of regulation and solvency

13-16  control by the group’s domiciliary regulator as are the

13-17  unincorporated members of the group;

13-18     (c) Reports annually to the Commissioner the information

13-19  required by subsection 1 of NRS 681A.180;

13-20     [(b)] (d) Has continuously transacted insurance outside the

13-21  United States for at least 3 years immediately before making an

13-22  application for accreditation;

13-23     [(c)] (e) Submits to this state’s authority to examine its books

13-24  and records and bears the expense of the examination;

13-25     [(d)] (f) Has aggregate policyholders’ surplus of

13-26  $10,000,000,000; and

13-27     [(e)] (g) Maintains a trust pursuant to subsection 2.

13-28     2.  The trust must be in an amount equal to the group’s several

13-29  liabilities attributable to business ceded by ceding insurers in the

13-30  United States to any member of the group pursuant to contracts of

13-31  reinsurance issued in the name of the group, and the group shall

13-32  maintain a joint surplus in trust of which $100,000,000 must be held

13-33  jointly for the benefit of ceding insurers in the United States to any

13-34  member of the group as additional security for any such liabilities.

13-35     3.  Each member of the group shall , within 90 days after the

13-36  date its financial statements must be filed with the group’s

13-37  domiciliary regulator, make available to the Commissioner an

13-38  annual certification of the member’s solvency by the member’s

13-39  domiciliary regulator and its independent public accountant.

13-40     Sec. 12.  NRS 681A.200 is hereby amended to read as follows:

13-41     681A.200  1.  A trust for the purposes of NRS 681A.180 or

13-42  681A.190 , and any amendment to the trust, must be established or

13-43  amended in a form approved by [the Commissioner.] :

13-44     (a) The Commissioner; and

14-1      (b) The commissioner of insurance or other appropriate

14-2  person of:

14-3          (1) The state in which the trust is domiciled; or

14-4          (2) Any other state that, pursuant to the trust instrument,

14-5  accepts regulatory authority over the trust.

14-6      2.  The form of the trust and any amendment to the trust must

14-7  be filed with the commissioner of insurance or other appropriate

14-8  person of each state in which the policyholders of the ceding

14-9  insurer who are the beneficiaries of the trust are domiciled.

14-10     3.  The trust instrument must provide that contested claims

14-11  become valid [and enforceable upon] , enforceable and payable

14-12  from money held in the trust fund to the extent that the contested

14-13  claims remain unsatisfied, within 30 days after the entry of the

14-14  final order of any court of competent jurisdiction in the United

14-15  States. The trust must vest legal title to its assets in the trustees of

14-16  the trust for its policyholders and ceding insurers in the United

14-17  States, their assigns and successors in interest. The trust and

14-18  the assuming insurer are subject to examination as determined by

14-19  the Commissioner. The trust must remain in effect for as long as the

14-20  assuming insurer or any member or former member of the group of

14-21  insurers has outstanding obligations due under the agreements for

14-22  reinsurance subject to the trust.

14-23     [2.  No]

14-24     4.  Not later than February 28 of each year the trustees of the

14-25  trust shall report to the Commissioner in writing setting forth the

14-26  balance of the trust and listing the trust’s investments at the end of

14-27  the preceding year and shall certify the date of termination of the

14-28  trust, if so planned, or certify that the trust will not expire before the

14-29  next following December 31.

14-30     Sec. 13.  NRS 681A.210 is hereby amended to read as follows:

14-31     681A.210  1.  Except as otherwise provided in subsection 2, if

14-32  the assuming insurer is not licensed or accredited to transact

14-33  insurance or reinsurance in this state, the credit permitted by NRS

14-34  681A.170 or 681A.180 must not be allowed unless the assuming

14-35  insurer agrees in the agreements for reinsurance:

14-36     (a) That in the event of the failure of the assuming insurer to

14-37  perform its obligations under the terms of the agreement, the

14-38  assuming insurer, at the request of the ceding insurer, will submit to

14-39  the jurisdiction of any court of competent jurisdiction in any state of

14-40  the United States, will comply with all requirements necessary to

14-41  give the court jurisdiction, and will abide by the final decision of the

14-42  court or of any appellate court in the event of an appeal; [and]

14-43     (b) To designate the Commissioner or a designated attorney as

14-44  its true and lawful attorney upon whom may be served any lawful

15-1  process in an action, suit or proceeding instituted by or on behalf of

15-2  the ceding company[.] ; and

15-3      (c) To comply with the conditions set forth in subsection 4 of

15-4  NRS 681A.180.

15-5      2.  This section does not conflict with or override the obligation

15-6  of the parties to an agreement for reinsurance to arbitrate their

15-7  disputes[,] if such an obligation is created in the agreement.

15-8      Sec. 14.  NRS 681A.420 is hereby amended to read as follows:

15-9      681A.420  1.  A person shall not act as a broker for

15-10  reinsurance [if he maintains an office, directly or as a member or

15-11  employee of a firm or association or as an officer, director or

15-12  employee of a corporation:

15-13     (a) In this state,] for a domestic insurer or reinsurer unless he

15-14  is [a] :

15-15     (a) A licensed producer in this state; or

15-16     (b) [In another state, unless he is a licensed producer] Licensed

15-17  as a nonresident intermediary for reinsurance in this state . [or in

15-18  another state having a law substantially similar to this title or he is

15-19  licensed in this state as a nonresident intermediary.]

15-20     2.  A person shall not act as a [manager] broker for reinsurance

15-21  [:

15-22     (a) For] for a foreign or alien insurer or reinsurer [domiciled] if

15-23  he maintains an office, directly or as a member or employee of a

15-24  firm or association or as an officer, director or employee of a

15-25  corporation in this state, unless he is [a] :

15-26     (a) A licensed producer in this state; or

15-27     (b) [In] Licensed as a nonresident intermediary for

15-28  reinsurance in this state . [, if he maintains an office individually or

15-29  as a member or employee of a firm or association or as an officer,

15-30  director or employee of a corporation in this state, unless he is a

15-31  licensed producer in this state; or

15-32     (c) In another state for a foreign insurer, unless he is a licensed

15-33  producer in this state or in another state having a law substantially

15-34  similar to this title or he is licensed in this state as a nonresident

15-35  intermediary.]

15-36     3.  A person shall not act as a manager for reinsurance [shall:]

15-37  for a domestic insurer or reinsurer unless he is:

15-38     (a) A licensed producer in this state; or

15-39     (b) Licensed as a nonresident manager for reinsurance in this

15-40  state.

15-41     4.  A person shall not act as a manager for reinsurance for

15-42  any foreign or alien insurer or reinsurer if he maintains an office,

15-43  directly or as a member or employee of a firm or association or as

15-44  an officer, director or employee of a corporation in this state,

15-45  unless he is:

16-1      (a) A licensed producer in this state; or

16-2      (b) Licensed as a nonresident manager for reinsurance in this

16-3  state.

16-4      5.  A manager for reinsurance shall:

16-5      (a) File a bond from an insurer in an amount that is acceptable to

16-6  the Commissioner for the protection of the reinsurer; and

16-7      (b) Maintain a policy covering errors and omissions in an

16-8  amount that is acceptable to the Commissioner.

16-9      Sec. 15.  NRS 681B.160 is hereby amended to read as follows:

16-10     681B.160  1.  [All] Except as otherwise provided in

16-11  subsection 5, all bonds or other evidences of debt having a fixed

16-12  term and rate of interest held by an insurer may, if amply secured

16-13  and not in default as to principal or interest, be valued as follows:

16-14     (a) If purchased at par, at the par value.

16-15     (b) If purchased above or below par, on the basis of the purchase

16-16  price adjusted so as to bring the value to par at maturity and so as to

16-17  yield in the meantime the effective rate of interest at which the

16-18  purchase was made[,] or , in lieu of [such] that method, according

16-19  to [such] an accepted method of valuation [as] that is approved by

16-20  the Commissioner.

16-21     2.  The purchase price [shall in no case] must not be taken at a

16-22  higher figure than the actual market value at the time of purchase,

16-23  plus actual brokerage, transfer, postage or express charges paid in

16-24  the acquisition of such securities.

16-25     3.  Unless otherwise provided by a valuation established or

16-26  approved by the Commissioner, [no such security shall] the security

16-27  must not be carried at above the call price for the entire issue during

16-28  any period within which the security may be so called.

16-29     4.  The Commissioner [shall have] has full discretion in

16-30  determining the method of calculating values [according to the rules

16-31  set forth in] pursuant to this section.

16-32     5.  A valuation determined pursuant to this section must not

16-33  be inconsistent with any applicable valuation or method then

16-34  currently formulated or approved by the National Association of

16-35  Insurance Commissioners or its successor organization.

16-36     Sec. 16.  NRS 681B.170 is hereby amended to read as follows:

16-37     681B.170  1.  [Securities,] Except as otherwise provided in

16-38  subsection 4, securities, other than those [referred to] specified in

16-39  NRS 681B.160, held by an insurer [shall] must be valued, in the

16-40  discretion of the Commissioner, at their market value, or at their

16-41  appraised value, or at prices determined by him as representing their

16-42  fair market value.

16-43     2.  Preferred or guaranteed stocks or shares while paying full

16-44  dividends may be carried at a fixed value in lieu of market value, at

16-45  the discretion of the Commissioner and in accordance with [such] a

17-1  method of computation [as he may approve.] approved by the

17-2  Commissioner.

17-3      3.  The stock of a subsidiary of an insurer [shall] must be

17-4  valued on the basis of the value of only [such of the] those assets of

17-5  [such] the subsidiary as would constitute lawful investments of the

17-6  insurer if acquired or held directly by the insurer.

17-7      4.  A valuation determined pursuant to this section must not

17-8  be inconsistent with any applicable valuation or method then

17-9  currently formulated or approved by the National Association of

17-10  Insurance Commissioners or its successor organization.

17-11     Sec. 17.  NRS 682A.080 is hereby amended to read as follows:

17-12     682A.080  1.  An insurer may invest any of its funds in

17-13  obligations other than those eligible for investment under NRS

17-14  682A.230 [(] , relating to real property mortgages , [),] if they are

17-15  issued, assumed or guaranteed by any solvent institution [created or

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

17-17  Mexico, or of any state, district, province or territory thereof,] and

17-18  are qualified under any of the following:

17-19     (a) Obligations which are secured by adequate collateral security

17-20  and bear fixed interest if , during each of any 3, including the last 2,

17-21  of the 5 fiscal years next preceding the date of acquisition by the

17-22  insurer, the net earnings of the issuing, assuming or guaranteeing

17-23  institution available for its fixed charges, as defined in NRS

17-24  682A.090, have been not less than 1 1/2 times the total of its fixed

17-25  charges for [such] that year. In determining the adequacy of

17-26  collateral security , not more than one-third of the total value of

17-27  [such] the required collateral may consist of stock other than stock

17-28  meeting the requirements of NRS 682A.100 [(] , relating to

17-29  preferred or guaranteed stock . [).]

17-30     (b) Fixed interest-bearing obligations, other than those described

17-31  in paragraph (a), if the net earnings of the issuing, assuming or

17-32  guaranteeing institution available for its fixed charges for a period

17-33  of 5 fiscal years next preceding the date of acquisition by the insurer

17-34  have averaged per year not less than 1 1/2 times its average annual

17-35  fixed charges applicable to [such] that period and if , during the last

17-36  year of [such period such] that period, the net earnings have been

17-37  not less than 1 1/2 times its fixed charges for [such] that year.

17-38     (c) Adjustment, income or other contingent interest obligations

17-39  if the net earnings of the issuing, assuming or guaranteeing

17-40  institution available for its fixed charges for a period of 5 fiscal

17-41  years next preceding the date of acquisition by the insurer have

17-42  averaged per year not less than 1 1/2 times the sum of its average

17-43  annual fixed charges and its average annual maximum contingent

17-44  interest applicable to such period and if , during each of the last 2

17-45  years of [such period such] that period, the net earnings have not

18-1  been less than 1 1/2 times the sum of its fixed charges and

18-2  maximum contingent interest for such year.

18-3      (d) Capital stock and other securities of:

18-4          (1) A state development corporation organized under the

18-5  provisions of chapter 670 of NRS.

18-6          (2) A corporation for economic revitalization and

18-7  diversification organized under the provisions of chapter 670A of

18-8  NRS, if the insurer is a member of the corporation, and to the extent

18-9  of its loan limit established under NRS 670A.200.

18-10     2.  No insurer may invest in any such bonds or evidences of

18-11  indebtedness in excess of 10 percent of any issue of such bonds or

18-12  evidences of indebtedness or, subject to subsection 1 of NRS

18-13  682A.050 [(diversification),] , relating to diversification, more than

18-14  an amount equal to 10 percent of the insurer’s admitted assets in any

18-15  issue.

18-16     Sec. 18.  NRS 682A.100 is hereby amended to read as follows:

18-17     682A.100  1.  An insurer may invest in preferred or

18-18  guaranteed stocks or shares of any solvent institution [existing under

18-19  the laws of the United States of America, Canada or Mexico, or of

18-20  any state or province thereof,] if all of the prior obligations and prior

18-21  preferred stocks, if any, of the institution at the date of acquisition of

18-22  the investment by the insurer are eligible as investments under this

18-23  chapter and if the net earnings of the institution available for its

18-24  fixed charges during either of the last 2 years have been, and during

18-25  each of the last 5 years have averaged, not less than 1 1/2 times the

18-26  sum of its average annual fixed charges, if any, its average annual

18-27  maximum contingent interest, if any, and its average annual

18-28  preferred dividend requirements. For the purposes of this section,

18-29  the computation refers to the fiscal years immediately preceding the

18-30  date of acquisition of the investment by the insurer, and the term

18-31  “preferred dividend requirement” means cumulative or

18-32  noncumulative dividends, whether paid or not.

18-33     2.  No insurer may invest in any such preferred or guaranteed

18-34  stocks in an amount in excess of 35 percent of the particular issue of

18-35  guaranteed or preferred stock or, subject to subsection 1 of NRS

18-36  682A.050 , more than an amount equal to 10 percent of the insurer’s

18-37  admitted assets in any one issue.

18-38     Sec. 19.  NRS 682A.110 is hereby amended to read as follows:

18-39     682A.110  1.  An insurer may invest up to 35 percent of its

18-40  assets in nonassessable common stocks, other than insurance stocks,

18-41  of any solvent corporation , [organized and existing under the laws

18-42  of the United States of America, Canada or Mexico, or of any state

18-43  or province thereof,] except that bank or trust company stocks may

18-44  be assessable and any stocks may be assessable for taxes[,] if the

18-45  corporation has had net earnings available for dividends on the stock

19-1  in each of the 5 fiscal years next preceding acquisition by the

19-2  insurer. If the issuing corporation has not been in legal existence for

19-3  all of the 5 fiscal years but was formed as a consolidation or merger

19-4  of two or more businesses of which at least one was in operation on

19-5  a date 5 years before the investment, the test of eligibility of its

19-6  common stock under this section must be based upon consolidated

19-7  pro forma statements of the predecessor or constituent institutions.

19-8      2.  Any amount invested in a fund or trust under NRS 682A.140

19-9  must not be included in computing the amounts prescribed in

19-10  subsection 1.

19-11     Sec. 20.  NRS 683A.08524 is hereby amended to read as

19-12  follows:

19-13     683A.08524  1.  Except as otherwise provided [by] in

19-14  subsection 2, the Commissioner shall issue a certificate of

19-15  registration as an administrator to an applicant who:

19-16     (a) Submits an application on a form prescribed by the

19-17  Commissioner;

19-18     (b) Has complied with the provisions of NRS 683A.08522; and

19-19     (c) Pays the fee for the issuance of a certificate of registration

19-20  prescribed in NRS 680B.010.

19-21     2.  The Commissioner may refuse to issue a certificate of

19-22  registration as an administrator to an applicant if the Commissioner

19-23  determines that the applicant or any person who has completed an

19-24  affidavit pursuant to subsection 6 of NRS 683A.08522:

19-25     (a) Is not competent to act as an administrator;

19-26     (b) Is not trustworthy or financially responsible;

19-27     (c) Does not have a good personal or business reputation;

19-28     (d) Has had a license or certificate to transact insurance denied

19-29  for cause, suspended or revoked in this state or any other state; [or]

19-30     (e) Has failed to comply with any provision of this chapter[.] ;

19-31  or

19-32     (f) Is financially unsound.

19-33     Sec. 21.  NRS 683A.08528 is hereby amended to read as

19-34  follows:

19-35     683A.08528  1.  Not later than [March] July 1 of each year,

19-36  each holder of a certificate of registration as an administrator shall

19-37  file [a financial statement] with the Commissioner [on a form

19-38  approved by the Commissioner.] an annual report for the most

19-39  recently completed fiscal year of the administrator. Each annual

19-40  report must be verified by at least two officers of the administrator.

19-41     2.  Each annual report filed pursuant to this section must

19-42  include all the following:

19-43     (a) Except as otherwise provided in this paragraph, a financial

19-44  statement of the administrator that has been audited and prepared

19-45  by an independent certified public accountant. In lieu of a

20-1  financial statement that has been audited and prepared by an

20-2  independent certified public accountant, the administrator may

20-3  include with the annual report a financial statement that has been

20-4  reviewed by an independent certified public accountant if:

20-5          (1) The total business assets of the administrator were less

20-6  than $100,000 at the end of the most recently completed fiscal year

20-7  of the administrator; or

20-8          (2) The administrator did not have any agreements to act as

20-9  an administrator during the most recently completed fiscal year of

20-10  the administrator.

20-11     (b) The complete name and address of each person, if any, for

20-12  whom the administrator agreed to act as an administrator during

20-13  the most recently completed fiscal year of the administrator.

20-14     (c) Any other information required by the Commissioner.

20-15     3.  In addition to the information required pursuant to

20-16  subsection 2, if an annual report is prepared on a consolidated

20-17  basis, the annual report must include a columnar or combining

20-18  worksheet that:

20-19     (a) Includes the amounts shown on the consolidated financial

20-20  statement accompanying the annual report;

20-21     (b) Separately sets forth the amounts for each entity included

20-22  in the worksheet; and

20-23     (c) Includes an explanation of each consolidating and

20-24  eliminating entry included in the worksheet.

20-25     4.  Each administrator who files an annual report pursuant to

20-26  this section shall, at the time of filing the annual report, pay a

20-27  filing fee in an amount determined by the Commissioner.

20-28     5.  On or before September 1 of each year, the Commissioner

20-29  shall, for each administrator, review the annual report that is most

20-30  recently filed by the administrator. As soon as practicable after

20-31  reviewing the report, the Commissioner shall:

20-32     (a) Issue a certificate to the administrator:

20-33         (1) Indicating that, based on the annual report and

20-34  accompanying financial statement, the administrator has a

20-35  positive net worth and is currently licensed and in good standing

20-36  in this state; or

20-37         (2) Setting forth any deficiency found by the Commissioner

20-38  in the annual report and accompanying financial statement; or

20-39     (b) Submit a statement to any electronic database maintained

20-40  by the National Association of Insurance Commissioners or any

20-41  affiliate or subsidiary of the Association:

20-42         (1) Indicating that, based on the annual report and

20-43  accompanying financial statement, the administrator has a

20-44  positive net worth and is in compliance with existing law; or

21-1          (2) Setting forth any deficiency found by the Commissioner

21-2  in the annual report and accompanying financial statement.

21-3      Sec. 22.  NRS 683A.0892 is hereby amended to read as

21-4  follows:

21-5      683A.0892  1.  The Commissioner:

21-6      [1.] (a) Shall suspend or revoke the certificate of registration of

21-7  an administrator if the Commissioner has determined, after notice

21-8  and a hearing, that the administrator:

21-9      [(a)] (1) Is in an unsound financial condition;

21-10     [(b)] (2) Uses methods or practices in the conduct of his

21-11  business that are hazardous or injurious to insured persons or

21-12  members of the general public; or

21-13     [(c)] (3) Has failed to pay any judgment against him in this state

21-14  within 60 days after the judgment became final.

21-15     [2.] (b) May suspend or revoke the certificate of registration of

21-16  an administrator if the Commissioner determines, after notice and a

21-17  hearing, that the administrator:

21-18     [(a)] (1) Has willfully violated or failed to comply with any

21-19  provision of this Code, any regulation adopted pursuant to this Code

21-20  or any order of the Commissioner;

21-21     [(b)] (2) Has refused to be examined by the Commissioner or

21-22  has refused to produce accounts, records or files for examination

21-23  upon the request of the Commissioner;

21-24     [(c)] (3) Has, without just cause, refused to pay claims or

21-25  perform services pursuant to his contracts or has, without just cause,

21-26  caused persons to accept less than the amount of money owed to

21-27  them pursuant to the contracts, or has caused persons to employ an

21-28  attorney or bring a civil action against him to receive full payment

21-29  or settlement of claims;

21-30     [(d)] (4) Is affiliated with, managed by or owned by another

21-31  administrator or an insurer who transacts insurance in this state

21-32  without a certificate of authority or certificate of registration;

21-33     [(e)] (5) Fails to comply with any of the requirements for a

21-34  certificate of registration;

21-35     [(f)] (6) Has been convicted of[,] or has entered a plea of guilty

21-36  or nolo contendere to a felony, whether or not adjudication was

21-37  withheld; [or

21-38     (g)] (7) Has had his authority to act as an administrator in

21-39  another state limited, suspended or revoked[.

21-40     3.  May,] ; or

21-41         (8) Has failed to file an annual report in accordance with

21-42  NRS 683A.08528.

21-43     (c) May suspend or revoke the certificate of registration of an

21-44  administrator if the Commissioner determines, after notice and a

21-45  hearing, that a responsible person:

22-1          (1) Has refused to provide any information relating to the

22-2  administrator’s affairs or refused to perform any other legal

22-3  obligation relating to an examination upon request by the

22-4  Commissioner; or

22-5          (2) Has been convicted of or has entered a plea of guilty or

22-6  nolo contendere to a felony committed on or after October 1, 2003,

22-7  whether or not adjudication was withheld.

22-8      (d) May, upon notice to the administrator, suspend the

22-9  certificate of registration of the administrator pending a hearing if:

22-10     [(a)] (1) The administrator is impaired or insolvent;

22-11     [(b)] (2) A proceeding for receivership, conservatorship or

22-12  rehabilitation has been commenced against the administrator in any

22-13  state; or

22-14     [(c)] (3) The financial condition or the business practices of the

22-15  administrator represent an imminent threat to the public health,

22-16  safety or welfare of the residents of this state.

22-17     [4.] (e) May, in addition to or in lieu of the suspension or

22-18  revocation of the certificate of registration of the administrator,

22-19  impose a fine of $2,000 for each act or violation.

22-20     2.  As used in this section, “responsible person” means any

22-21  person who is responsible for or controls or is authorized to

22-22  control or advise the affairs of an administrator, including,

22-23  without limitation:

22-24     (a) A member of the board of directors, board of trustees,

22-25  executive committee or other governing board or committee of the

22-26  administrator;

22-27     (b) The president, vice president, chief executive officer, chief

22-28  operating officer or any other principal officer of an

22-29  administrator, if the administrator is a corporation;

22-30     (c) A partner or member of the administrator, if the

22-31  administrator is a partnership, association or limited-liability

22-32  company; and

22-33     (d) Any shareholder or member of the administrator who

22-34  directly or indirectly holds 10 percent or more of the voting stock,

22-35  voting securities or voting interest of the administrator.

22-36     Sec. 23.  NRS 683A.201 is hereby amended to read as follows:

22-37     683A.201  1.  A person shall not sell, solicit or negotiate

22-38  insurance in this state for any class of insurance unless he is licensed

22-39  for that class of insurance.

22-40     2.  An insurer is exempt from the requirement for licensure as a

22-41  producer of insurance, but this exemption does not extend to an

22-42  insurer’s officers, directors, employees, subsidiaries or affiliates[.]

22-43  who sell, solicit or negotiate insurance.

23-1      3.  A person required to be licensed in this state who transacts

23-2  insurance without a license is subject to an administrative fine of not

23-3  more that $1,000 for each violation.

23-4      Sec. 24.  NRS 683A.211 is hereby amended to read as follows:

23-5      683A.211  The following persons need not be licensed as

23-6  producers of insurance:

23-7      1.  An officer, director or employee of an insurer or of a

23-8  producer of insurance if the officer, director or employee does not

23-9  receive any commission on policies written or sold to insure risks

23-10  residing, located or to be performed in this state and:

23-11     (a) The officer, director or employee’s activities are executive,

23-12  administrative, managerial[,] or clerical , or a combination [of

23-13  these,] thereof, and are only indirectly related to the sale,

23-14  solicitation or negotiation of insurance;

23-15     (b) The officer, director or employee’s function relates to

23-16  underwriting, control of losses, inspection or the processing,

23-17  adjusting, investigating or settling of claims on contracts of

23-18  insurance; or

23-19     (c) The officer, director or employee is acting in the capacity of

23-20  a special agent or supervisor of an agency assisting producers of

23-21  insurance where his activities are limited to providing technical

23-22  advice and assistance to licensed producers and do not include sale,

23-23  solicitation or negotiation of insurance.

23-24     2.  A person who secures and furnishes information for the

23-25  purpose of group life insurance, group property and casualty

23-26  insurance, group annuities, or group or blanket accident and health

23-27  insurance, or for the purpose of enrolling natural persons under

23-28  plans, issuing certificates under plans or otherwise assisting in

23-29  administering plans, or who performs administrative services related

23-30  to mass marketed property and casualty insurance, if no commission

23-31  is paid to him for the service[.] and he does not sell, solicit or

23-32  negotiate insurance. As used in this subsection, “blanket accident

23-33  and health insurance” has the meaning ascribed to it in

23-34  NRS 689B.070.

23-35     3.  An employer or association or its officers, directors or

23-36  employees, or the trustees of an employees’ trust plan, to the extent

23-37  that the employer, association, officers, directors, employees or

23-38  trustees are engaged in the administration or operation of a program

23-39  of employees’ benefits for the employer’s or association’s own

23-40  employees or the employees of its subsidiaries or affiliates, if the

23-41  program involves the use of insurance issued by an insurer and the

23-42  employer, association, officers, directors, employees or trustees are

23-43  not compensated by the insurer issuing the contracts.

23-44     4.  Employees of insurers or organizations employed by

23-45  insurers who are engaged in the inspection, rating or classification

24-1  of risks or in the supervision of the training of producers of

24-2  insurance and are not individually engaged in the sale, solicitation or

24-3  negotiation of insurance.

24-4      5.  A person whose activities in this state are limited to

24-5  advertising, without the intent to solicit insurance in this state,

24-6  through communications in printed publications or electronic mass

24-7  media whose distribution is not limited to residents of this state, if

24-8  he does not sell, solicit or negotiate insurance of risks residing,

24-9  located or to be performed in this state.

24-10     6.  A salaried full-time employee who counsels or advises his

24-11  employer concerning the interests of the employer, or of the

24-12  subsidiaries or affiliates of the employer, in insurance, if the

24-13  employee does not sell or solicit insurance or receive a commission.

24-14     7.  An employee of a producer of insurance or an insurer who

24-15  responds to requests from holders of policies previously issued, if

24-16  the employee is not directly compensated according to the volume

24-17  of premiums that may result from those services and does not solicit

24-18  insurance or offer advice concerning terms or conditions of policies.

24-19     Sec. 25.  NRS 683A.251 is hereby amended to read as follows:

24-20     683A.251  1.  The Commissioner shall prescribe the form of

24-21  application by a natural person for a license as a resident producer

24-22  of insurance. The applicant must declare, under penalty of refusal to

24-23  issue, or suspension or revocation of, the license, that the statements

24-24  made in the application are true, correct and complete to the best of

24-25  his knowledge and belief. Before approving the application, the

24-26  Commissioner must find that the applicant has:

24-27     (a) Attained the age of 18 years;

24-28     (b) Not committed any act that is a ground for refusal to issue,

24-29  or suspension or revocation of, a license;

24-30     (c) Completed a course of study for the lines of authority for

24-31  which the application is made, unless the applicant is exempt from

24-32  this requirement;

24-33     (d) Paid the fee prescribed for the license and a fee of $15 for

24-34  deposit in the Insurance Recovery Account, neither of which may be

24-35  refunded; and

24-36     (e) Successfully passed the examinations for the lines of

24-37  authority for which application is made, unless the applicant is

24-38  exempt from this requirement.

24-39     2.  A business organization must be licensed as a producer of

24-40  insurance in order to act as such. Application must be made on a

24-41  form prescribed by the Commissioner. Before approving the

24-42  application, the Commissioner must find that the applicant has:

24-43     (a) Paid the fee prescribed for the license and a fee of $15 for

24-44  deposit in the Insurance Recovery Account, neither of which may be

24-45  refunded; and

25-1      (b) Designated a natural person who is licensed as a producer of

25-2  insurance and who is affiliated with the business organization to be

25-3  responsible for the organization’s compliance with the laws and

25-4  regulations of this state relating to insurance.

25-5      3.  A natural person who is a resident of this state applying for a

25-6  license must furnish a copy of a search concerning him conducted

25-7  by the Federal Bureau of Investigation in its national criminal

25-8  records[,] and of a search concerning him of the Central Repository

25-9  for Nevada Records of Criminal History. The Commissioner shall

25-10  adopt regulations concerning the procedures for obtaining this

25-11  information.

25-12     4.  The Commissioner may require any document reasonably

25-13  necessary to verify information contained in an application.

25-14     Sec. 26.  NRS 683A.261 is hereby amended to read as follows:

25-15     683A.261  1.  Unless the Commissioner refuses to issue the

25-16  license under NRS 683A.451, he shall issue a license as a producer

25-17  of insurance to a person who has satisfied the requirements of NRS

25-18  683A.241 and 683A.251. A producer of insurance may qualify for

25-19  a license in one or more of the lines of authority permitted by statute

25-20  or regulation, including:

25-21     (a) Life insurance on human lives, which includes benefits from

25-22  endowments and annuities and may include additional benefits from

25-23  death by accident and benefits for dismemberment by accident and

25-24  for disability.

25-25     (b) Health insurance for sickness, bodily injury or accidental

25-26  death, which may include benefits for disability.

25-27     (c) Property insurance for direct or consequential loss or damage

25-28  to property of every kind.

25-29     (d) Casualty insurance against legal liability, including liability

25-30  for death, injury or disability and damage to real or personal

25-31  property.

25-32     (e) Surety indemnifying financial institutions or providing bonds

25-33  for fidelity, performance of contracts[,] or financial guaranty.

25-34     (f) Variable annuities[,] and variable life insurance, including

25-35  coverage reflecting the results of a separate investment account.

25-36     (g) Credit insurance, including life, disability, property,

25-37  unemployment, involuntary unemployment, mortgage life, mortgage

25-38  guaranty, mortgage disability, guaranteed protection of assets, and

25-39  any other form of insurance offered in connection with an extension

25-40  of credit that is limited to wholly or partially extinguishing the

25-41  obligation which the Commissioner determines should be

25-42  considered as limited-line credit insurance.

25-43     (h) Personal lines, consisting of automobile and motorcycle

25-44  insurance and residential property insurance, including coverage for

25-45  flood, of personal watercraft and of excess liability, written over one

26-1  or more underlying policies of automobile or residential property

26-2  insurance.

26-3      (i) Fixed annuities as a limited line.

26-4      (j) Travel and baggage as a limited line.

26-5      (k) Rental car agency as a limited line.

26-6      2.  A license as a producer of insurance remains in effect unless

26-7  revoked, suspended[, allowed to expire] or otherwise terminated[,

26-8  if the license is renewed when due,] if a request for a renewal is

26-9  submitted on or before the date for the renewal specified on the

26-10  license, the fee for renewal and a fee of $15 for deposit in the

26-11  Insurance Recovery Account are paid for each license and each

26-12  affiliation with a business organization licensed pursuant to

26-13  subsection 2 of NRS 683A.251 , and any requirement for education

26-14  or any other requirement to renew the license is satisfied by the

26-15  [due date.] date specified on the license for the renewal. A

26-16  producer of insurance may submit a request for a renewal of his

26-17  license within 30 days after the date specified on the license for the

26-18  renewal if the producer of insurance otherwise complies with the

26-19  provisions of this subsection and pays, in addition to any fee paid

26-20  pursuant to this subsection, a penalty of 50 percent of the renewal

26-21  fee. A license as a producer of insurance expires if the

26-22  Commissioner receives a request for a renewal of the license more

26-23  than 30 days after the date specified on the license for the renewal.

26-24  A fee paid pursuant to this subsection is nonrefundable.

26-25     3.  A natural person who allows his license as a producer of

26-26  insurance to expire may reapply for the same license within 12

26-27  months after the date specified on the license for a renewal [was

26-28  due] without passing a written examination[,] or completing a

26-29  course of study required by paragraph (c) of subsection 1 of NRS

26-30  683A.251, but a penalty of twice the [unpaid] renewal fee is

26-31  required for any request for a renewal [fee] of the license that is

26-32  received after the [due date.] date specified on the license for the

26-33  renewal.

26-34     4.  A licensed producer of insurance who is unable to renew his

26-35  license because of military service, extended medical disability or

26-36  other extenuating circumstance may request a waiver of the time

26-37  limit and of [an examination,] any fine or sanction otherwise

26-38  required or imposed because of the failure to renew.

26-39     5.  A license must state the licensee’s name, address, personal

26-40  identification number, the date of issuance, the lines of authority and

26-41  the date of expiration and must contain any other information the

26-42  Commissioner considers necessary. A resident producer of

26-43  insurance shall maintain a place of business in this state which is

26-44  accessible to the public and where he principally conducts

26-45  transactions under his license. The place of business may be in his

27-1  residence. The license must be conspicuously displayed in an area of

27-2  the place of business which is open to the public.

27-3      6.  A licensee shall inform the Commissioner of [a] each

27-4  change of location from which he conducts business as a producer

27-5  of insurance and each change of business or residence address, in

27-6  writing or by other means acceptable to the Commissioner , within

27-7  30 days after the change. If a licensee changes [his] the location

27-8  from which he conducts business as a producer of insurance or

27-9  his business or residence address without giving written notice and

27-10  the Commissioner is unable to locate the licensee after diligent

27-11  effort, he may revoke the license without a hearing. The mailing of a

27-12  letter by certified mail, return receipt requested, addressed to the

27-13  licensee at his last mailing address appearing on the records of the

27-14  Division, and the return of the letter undelivered, constitutes a

27-15  diligent effort by the Commissioner.

27-16     Sec. 27.  NRS 683A.301 is hereby amended to read as follows:

27-17     683A.301  1.  An applicant for a license as a producer of

27-18  insurance or a licensee who desires to use a name other than his true

27-19  name as shown on the license shall submit a request for approval of

27-20  the name and file with the Commissioner a certified copy of the

27-21  certificate or any renewal certificate filed pursuant to chapter 602 of

27-22  NRS. An incorporated applicant or licensee shall file with the

27-23  Commissioner a document showing the corporation’s true name and

27-24  all fictitious names under which it conducts or intends to conduct

27-25  business. A licensee shall file promptly with the Commissioner a

27-26  written notice of any change in or discontinuance of the use of a

27-27  fictitious name.

27-28     2.  The Commissioner may disapprove in writing the use of a

27-29  true name, other than the true name of a natural person who is the

27-30  applicant or licensee, or a fictitious name of any applicant or

27-31  licensee, on any of the following grounds:

27-32     (a) The name interferes with or is deceptively similar to a name

27-33  already filed and in use by another licensee.

27-34     (b) Use of the name may mislead the public in any respect.

27-35     (c) The name states or implies that the applicant or licensee is an

27-36  insurer, motor club or hospital service plan or is entitled to engage

27-37  in activities related to insurance not permitted under the license

27-38  applied for or held.

27-39     (d) The name states or implies that the licensee is an

27-40  underwriter, but:

27-41         (1) A natural person licensed as an agent or broker for life

27-42  insurance may describe himself as an underwriter or “chartered life

27-43  underwriter” if entitled to do so;

28-1          (2) A natural person licensed for property and casualty

28-2  insurance may use the designation “chartered property and casualty

28-3  underwriter” if entitled thereto; and

28-4          (3) An insurance agent or brokers’ trade association may use

28-5  a name containing the word “underwriter.”

28-6      (e) The licensee [has already filed and not discontinued the use

28-7  of] submits a request to use more than [two names, including the

28-8  true name.] one fictitious name at a single business location.

28-9      3.  A licensee shall not use a name after written notice from the

28-10  Commissioner indicates that its use violates the provisions of this

28-11  section. If the Commissioner determines that the use is justified by

28-12  mitigating circumstances, he may permit, in writing, the use of the

28-13  name to continue for a specified reasonable period upon conditions

28-14  imposed by him for the protection of the public consistent with this

28-15  section.

28-16     4.  Paragraphs (a), (c) and (d) of subsection 2 do not apply to

28-17  the true name of an organization which on July 1, 1965, held under

28-18  that name a type of license similar to those governed by this chapter,

28-19  or to a fictitious name used on July 1, 1965, by a natural person or

28-20  organization holding such a license, if the fictitious name was filed

28-21  with the Commissioner on or before July 1, 1965.

28-22     Sec. 28.  NRS 683A.351 is hereby amended to read as follows:

28-23     683A.351  1.  Every producer of insurance shall keep

28-24  complete records of transactions under his license. The records must

28-25  show, for each insurance policy placed or countersigned by or

28-26  through the licensee, not less than the names of the insurer and

28-27  insured, the number and expiration date of, and premium payable as

28-28  to, the policy or contract, the names of all other persons from whom

28-29  business is accepted or to whom commissions are promised or paid,

28-30  all premiums collected, and such additional information as the

28-31  Commissioner may reasonably require.

28-32     2.  The records must be open to examination of the

28-33  Commissioner at all times, and the Commissioner may at any time

28-34  require the licensee to furnish to him, in such a manner or form as

28-35  he requires, any information kept or required to be kept in those

28-36  records. The records may be kept in an electronic format if, using

28-37  the electronic format, the records are retained in accordance with

28-38  this section.

28-39     3.  Records of a particular policy or contract may be destroyed

28-40  3 years after expiration of the policy or contract.

28-41     Sec. 29.  Chapter 683C of NRS is hereby amended by adding

28-42  thereto the provisions set forth as sections 30 and 31 of this act.

28-43     Sec. 30.  The provisions of chapters 679A and 679B of NRS

28-44  and NRS 683A.301, 683A.341 and 683A.351 apply to an insurance

28-45  consultant.

29-1      Sec. 31.  A licensee shall inform the Commissioner of all

29-2  locations from which business is conducted and of any change of

29-3  business or residence address, in writing or by any other means

29-4  acceptable to the Commissioner, within 30 days after the change.

29-5  If a licensee changes his address without giving written notice and

29-6  the Commissioner is unable to locate the licensee after making a

29-7  diligent effort, the Commissioner may revoke the license without a

29-8  hearing. The mailing of a letter by certified mail, return receipt

29-9  requested, addressed to the licensee at his last mailing address

29-10  appearing on the records of the Division, and the return of the

29-11  letter undelivered, constitutes a diligent effort by the

29-12  Commissioner.

29-13     Sec. 32.  NRS 683C.020 is hereby amended to read as follows:

29-14     683C.020  1.  Except as otherwise provided in subsection 2,

29-15  no person may engage in the business of an insurance consultant

29-16  unless a license has been issued to him by the Commissioner.

29-17     2.  An insurance consultant’s license is not required for:

29-18     (a) An attorney licensed to practice law in this state who is

29-19  acting in his professional capacity;

29-20     (b) A licensed insurance agent, broker or surplus lines broker;

29-21     (c) A trust officer of a bank who is acting in the normal course

29-22  of his employment; or

29-23     (d) An actuary or a certified public accountant who provides

29-24  information, recommendations, advice or services in his

29-25  professional capacity.

29-26     3.  A person required to be licensed in this state who acts as

29-27  an insurance consultant without a license is subject to an

29-28  administrative fine of not more than $1,000 for each act or

29-29  violation.

29-30     Sec. 33.  NRS 683C.030 is hereby amended to read as follows:

29-31     683C.030  1.  An application for a license to act as an

29-32  insurance consultant must be submitted to the Commissioner on

29-33  forms prescribed by the Commissioner and must be accompanied by

29-34  [a]the applicable license fee [of $78]set forth in NRS 680B.010

29-35  and an additional fee of $15 which must be deposited in the

29-36  Insurance Recovery Account created pursuant to NRS 679B.305.

29-37  The license fee and the additional fee are not refundable. If the

29-38  applicant is a natural person, the application must include the social

29-39  security number of the applicant.

29-40     2.  An applicant for an insurance consultant’s license must

29-41  successfully complete an examination and a course of instruction

29-42  which the Commissioner shall establish by regulation.

29-43     3.  Each license issued pursuant to this chapter is valid for 3

29-44  years from the date of issuance[,] or until it is suspended, revoked

29-45  or otherwise terminated.

30-1      Sec. 34.  NRS 683C.035 is hereby amended to read as follows:

30-2      683C.035  1.  The Commissioner shall prescribe the form of

30-3  application by a natural person for a license as an insurance

30-4  consultant. The applicant must declare, under penalty of refusal to

30-5  issue, or suspension or revocation of, the license, that the statements

30-6  made in the application are true, correct and complete to the best of

30-7  his knowledge and belief. Before approving the application, the

30-8  Commissioner must find that the applicant has:

30-9      (a) Attained the age of 18 years.

30-10     (b) Not committed any act that is a ground for refusal to issue,

30-11  or suspension or revocation of, a license[.] pursuant to

30-12  NRS 683A.451.

30-13     (c) Paid the fee prescribed for the license and a fee of $15 for

30-14  deposit in the Insurance Recovery Account, neither of which may be

30-15  refunded.

30-16     (d) Passed each examination required for the license and

30-17  successfully completed each course of instruction which the

30-18  Commissioner requires by regulation, unless he is a resident of

30-19  another state and holds a similar license in that state.

30-20     2.  A business organization must be licensed as an insurance

30-21  consultant in order to act as such. Application must be made on a

30-22  form prescribed by the Commissioner. Before approving the

30-23  application, the Commissioner must find that the applicant has:

30-24     (a) Paid the fee prescribed for the license and a fee of $15 for

30-25  deposit in the Insurance Recovery Account, neither of which may be

30-26  refunded; and

30-27     (b) Designated a natural person who is licensed as an insurance

30-28  consultant in this state and who is affiliated with the business

30-29  organization to be responsible for the organization’s compliance

30-30  with the laws and regulations of this state relating to insurance.

30-31     3.  The Commissioner may require any document reasonably

30-32  necessary to verify information contained in an application.

30-33     4.  A license issued pursuant to this chapter is valid for 3 years

30-34  after the date of issuance or until it is suspended, revoked or

30-35  otherwise terminated.

30-36     5.  An insurance consultant may qualify for a license

30-37  pursuant to this chapter in one or more of the lines of authority set

30-38  forth in paragraphs (a) to (d), inclusive, of subsection 1 of

30-39  NRS 683A.261.

30-40     Sec. 35.  NRS 683C.040 is hereby amended to read as follows:

30-41     683C.040  1.  A license may be renewed for additional 3-year

30-42  periods by submitting to the Commissioner an application for

30-43  renewal and:

30-44     [1.] (a) If the application is made:

31-1      [(a)] (1) On or before the expiration date of the license, the

31-2  applicable renewal fee and an additional fee of $15 for deposit in the

31-3  Insurance Recovery Account; or

31-4      [(b)] (2) Not more than 30 days after the expiration date of the

31-5  license, the applicable renewal fee plus any late fee required and an

31-6  additional fee of $15 for deposit in the Insurance Recovery Account;

31-7      [2.] (b) If the applicant is a natural person, the statement

31-8  required pursuant to NRS 683C.043; and

31-9      [3.] (c) If the applicant is a resident, proof of the successful

31-10  completion of appropriate courses of study required for renewal, as

31-11  established by the Commissioner by regulation.

31-12     2.  The fees specified in this section are not refundable.

31-13     Sec. 36.  NRS 683C.070 is hereby amended to read as follows:

31-14     683C.070  [No] A person licensed pursuant to this chapter may

31-15  not concurrently hold [an insurance agent’s license, broker’s] a

31-16  license as a producer of insurance or a surplus lines broker’s

31-17  license in any line.

31-18     Sec. 37.  NRS 683C.080 is hereby amended to read as follows:

31-19     683C.080  [No] A licensed insurance consultant [may] shall not

31-20  employ, be employed by or be in partnership with, or receive any

31-21  remuneration arising out of his activities as an insurance consultant

31-22  from, any licensed producer of insurance [agent, broker] or surplus

31-23  lines broker or insurer.

31-24     Sec. 38.  NRS 685A.070 is hereby amended to read as follows:

31-25     685A.070  1.  A broker shall not knowingly place surplus lines

31-26  insurance with an insurer which is unsound financially or ineligible

31-27  pursuant to this section.

31-28     2.  Except as otherwise provided in this section, [no]an insurer

31-29  is not eligible [for the acceptance of]to accept surplus lines risks

31-30  pursuant to this chapter unless it has surplus as to policyholders in

31-31  an amount of not less than [$5,000,000]$15,000,000 and, if an alien

31-32  insurer, unless it has and maintains in a bank or trust company

31-33  which is a member of the United States Federal Reserve System a

31-34  trust fund established pursuant to terms that are reasonably

31-35  adequate [for the protection of]to protect all of its policyholders in

31-36  the United States .[in an amount of not less than $1,500,000.] Such

31-37  a trust fund must not have an expiration date which is at any time

31-38  less than 5 years in the future, on a continuing basis. In the case of:

31-39     (a) A single alien insurer, such a trust fund must not be less

31-40  than the greater of $5,400,000 or 30 percent of the gross liabilities

31-41  of the alien insurer for surplus lines in the United States,

31-42  excluding any liabilities for aviation, wet marine and

31-43  transportation insurance, not to exceed $60,000,000, to be

31-44  determined annually on the basis of accounting practices and

31-45  procedures that are substantially equivalent to the accounting

32-1  practices and procedures applicable in this state as of

32-2  December 31 of the year immediately preceding the date of the

32-3  determination where:

32-4          (1) The liabilities are maintained in an irrevocable trust

32-5  account in a qualified financial institution in the United States, on

32-6  behalf of policyholders in the United States, consisting of cash,

32-7  securities, letters of credit or any other investments of substantially

32-8  the same character and quality as investments that are eligible

32-9  investments pursuant to chapter 682A of NRS for the capital and

32-10  statutory reserves of admitted insurers to write like kinds of

32-11  insurance in this state. The trust fund, which must be included in

32-12  any calculation of capital and surplus or its equivalent, must

32-13  comply with the requirements set forth in the Standard Trust

32-14  Agreement required for listing with the International Insurers

32-15  Department of the National Association of Insurance

32-16  Commissioners;

32-17         (2) The alien insurer may request approval by the

32-18  Commissioner to use the trust fund to pay any valid claim against

32-19  a surplus line if the balance of the trust fund is not, during any

32-20  period, less than $5,400,000 or 30 percent of the alien insurer’s

32-21  current gross liabilities for surplus lines in the United States,

32-22  excluding any liabilities for aviation, wet marine and

32-23  transportation insurance; and

32-24         (3) In calculating the amount of the trust fund required by

32-25  this subsection, credit must be given for any deposits for any

32-26  surplus lines that are separately required and maintained within a

32-27  state or territory of the United States, not to exceed the amount of

32-28  the alien insurer’s loss and loss adjustment reserves maintained in

32-29  that state or territory.

32-30     (b) A group of insurers which includes individual

32-31  unincorporated insurers, such a trust fund must not be less than

32-32  $100,000,000.

32-33     [(b)] (c) A group of incorporated insurers under common

32-34  administration, such a trust fund must not be less than

32-35  $100,000,000. Each insurer within the group must individually

32-36  maintain capital and surplus of not less than $25,000,000. The

32-37  group of incorporated insurers must:

32-38         (1) Operate under the supervision of the Department of Trade

32-39  and Industry of the United Kingdom;

32-40         (2) Possess aggregate policyholders surplus of

32-41  $10,000,000,000, which must consist of money in trust in an amount

32-42  not less than the assuming insurers’ liabilities attributable to

32-43  insurance written in the United States; and

33-1          (3) Maintain a joint trusteed surplus of which $100,000,000

33-2  must be held jointly for the benefit of United States ceding insurers

33-3  of any member of the group.

33-4      [(c)] (d) An insurance exchange created by the laws of a state,

33-5  the insurance exchange shall have and maintain a trust fund in an

33-6  amount of not less than [$50,000,000]$75,000,000 or have a

33-7  surplus as to policyholders in an amount of not less than

33-8  [$50,000,000.]$75,000,000. If an insurance exchange maintains

33-9  money for the protection of all policyholders, each syndicate shall

33-10  maintain minimum capital and surplus of not less than [$5,000,000]

33-11  $15,000,000 and must qualify separately to be eligible for the

33-12  acceptance of surplus lines risks pursuant to this chapter.

33-13  The Commissioner may require larger trust funds or surplus as to

33-14  policyholders than those set forth in this section if, in his judgment,

33-15  the volume of business being transacted or proposed to be transacted

33-16  warrants larger amounts.

33-17     3.  [No]An insurer is not eligible to write surplus lines of

33-18  insurance unless it has established a reputation for financial integrity

33-19  and satisfactory practices in underwriting and handling claims. In

33-20  addition, a foreign insurer must be authorized in the state of its

33-21  domicile to write the kinds of insurance which it intends to write in

33-22  Nevada.

33-23     4.  The Commissioner may from time to time compile or

33-24  approve a list of all surplus lines insurers deemed by him to be

33-25  eligible currently, and may mail a copy of the list to each broker at

33-26  his office last of record with the Commissioner. To be placed on the

33-27  list, a surplus lines insurer must file an application with the

33-28  Commissioner. The application must be accompanied by a

33-29  nonrefundable fee of $2,450. This subsection does not require the

33-30  Commissioner to determine the actual financial condition or claims

33-31  practices of any unauthorized insurer. The status of eligibility, if

33-32  granted by the Commissioner, indicates only that the insurer appears

33-33  to be sound financially and to have satisfactory claims practices, and

33-34  that the Commissioner has no credible evidence to the contrary.

33-35  While any such list is in effect, the broker shall restrict to the

33-36  insurers so listed all surplus lines business placed by him.

33-37     Sec. 38.3.  NRS 685A.080 is hereby amended to read as

33-38  follows:

33-39     685A.080 1.  Upon placing a surplus lines coverage, the

33-40  broker shall promptly issue and deliver to the insured evidence of

33-41  the insurance consisting either of the policy as issued by the insurer,

33-42  or, if such a policy is not then available, the surplus lines broker’s

33-43  certificate executed by the broker or a cover note . [endorsed by the

33-44  broker.] Such a certificate or [endorsed] cover note must show the

33-45  description and location of the subject of the insurance, coverage,

34-1  conditions and term of the insurance, the premium and rate charged

34-2  and taxes collected from the insured, and the name and address of

34-3  the insured and insurer and must state that the broker has verified

34-4  that the insurance described has been granted or issued. If the direct

34-5  risk is assumed by more than one insurer, the certificate must state

34-6  the name and address and proportion of the entire direct risk

34-7  assumed by each such insurer.

34-8      2.  A broker shall not issue any such certificate or any cover

34-9  note, or purport to insure or represent that insurance will be or has

34-10  been granted by any unauthorized insurer, unless he has prior

34-11  written authority from the insurer for the insurance, or has received

34-12  information from the insurer in the regular course of business that

34-13  the insurance has been granted, or an insurance policy providing the

34-14  insurance actually has been issued by the insurer and delivered to

34-15  the insured.

34-16     3.  If after the issuance and delivery of any such certificate there

34-17  is any change as to the identity of the insurers, or the proportion of

34-18  the direct risk assumed by an insurer as stated in the broker’s

34-19  original certificate, or in any other material respect as to the

34-20  insurance evidenced by the certificate, the broker shall promptly

34-21  issue and deliver to the insured a substitute certificate accurately

34-22  showing the current status of the coverage and the insurers

34-23  responsible thereunder.

34-24     4.  If a policy issued by the insurer is not available upon

34-25  placement of the insurance and the broker has issued and delivered

34-26  his certificate as provided in this section, upon request therefor by

34-27  the insured the broker shall as soon as reasonably possible procure

34-28  from the insurer its policy evidencing the insurance and deliver the

34-29  policy to the insured in replacement of the broker’s certificate

34-30  theretofore issued.

34-31     5.  Any surplus lines broker who knowingly or negligently

34-32  issues a false certificate of insurance or who fails promptly to notify

34-33  the insured of any material change with respect to the insurance by

34-34  delivery to the insured of a substitute certificate as provided in

34-35  subsection 3 is subject to the penalty provided by NRS 679A.180 or

34-36  to any greater applicable penalty otherwise provided by law.

34-37     Sec. 38.7. NRS 685A.090 is hereby amended to read as

34-38  follows:

34-39     685A.090  [Every] Each insurance contract procured and

34-40  delivered as a surplus lines coverage pursuant to this chapter must

34-41  [be countersigned by the broker who procured it, and must] have

34-42  conspicuously stamped upon it:

 

34-43  This insurance contract is issued pursuant to the Nevada

34-44  insurance laws by an insurer neither licensed by nor under the

35-1  supervision of the Division of Insurance of the Department of

35-2  Business and Industry of the State of Nevada. If the insurer is

35-3  found insolvent, a claim under this contract is not covered by

35-4  the Nevada Insurance Guaranty Association Act.

 

35-5      Sec. 39.  NRS 685A.120 is hereby amended to read as follows:

35-6      685A.120  1.  No person [in this state] may act as, hold

35-7  himself out as[,] or be a surplus lines broker with respect to subjects

35-8  of insurance resident, located or to be performed in this state or

35-9  elsewhere unless he is licensed as such by the Commissioner

35-10  pursuant to this chapter.

35-11     2.  Any person who has been licensed by this state as a [broker]

35-12  producer of insurance for general lines for at least 6 months, or has

35-13  been licensed in another state as a surplus lines broker [for at least 1

35-14  year] and continues to be licensed in that state, and who is deemed

35-15  by the Commissioner to be competent and trustworthy with respect

35-16  to the handling of surplus lines may be licensed as a surplus lines

35-17  broker upon:

35-18     (a) Application for a license and payment of the applicable fee

35-19  for a license and a fee of $15 for deposit in the Insurance Recovery

35-20  Account created by NRS 679B.305;

35-21     (b) Submitting the statement required pursuant to NRS

35-22  685A.127; and

35-23     (c) Passing any examination prescribed by the Commissioner on

35-24  the subject of surplus lines.

35-25     3.  An application for a license must be submitted to the

35-26  Commissioner on a form designated and furnished by him. The

35-27  application must include the social security number of the applicant.

35-28     4.  A license issued pursuant to this chapter continues in force

35-29  for 3 years unless it is suspended, revoked or otherwise terminated.

35-30  The license may be renewed upon submission of the statement

35-31  required pursuant to NRS 685A.127 and payment of the applicable

35-32  fee for renewal and a fee of $15 for deposit in the Insurance

35-33  Recovery Account created by NRS 679B.305 to the Commissioner

35-34  on or before the last day of the month in which the license is

35-35  renewable.

35-36     5.  A license which is not renewed expires at midnight on the

35-37  last day specified for its renewal. The Commissioner may accept a

35-38  request for renewal received by him within 30 days after the

35-39  expiration of the license if the request is accompanied by [the] :

35-40     (a) The statement required pursuant to NRS 685A.127[, a] ;

35-41     (b) The applicable fee for renewal [of 150] ;

35-42     (c) A penalty in an amount that is equal to 50 percent of the

35-43  applicable fee [otherwise required and a] for renewal; and

36-1      (d) A fee of $15 for deposit in the Insurance Recovery Account

36-2  created by NRS 679B.305.

36-3      Sec. 39.5. NRS 685A.180 is hereby amended to read as

36-4  follows:

36-5      685A.180  1.  On or before March 1 of each year each broker

36-6  shall pay to the Commissioner a tax on surplus lines coverages

36-7  written by him in unauthorized insurers during the preceding

36-8  calendar year at the same rate of tax as imposed by law on the

36-9  premiums of similar coverages written by authorized insurers. If a

36-10  broker has paid any taxes pursuant to NRS 685A.175, he shall

36-11  deduct the total paid from the tax due and pay the remainder, if any.

36-12     2.  For the purposes of this section, the “premium” on surplus

36-13  lines coverages includes:

36-14     (a) The gross amount charged by the insurer for the insurance,

36-15  less any return premium;

36-16     (b) Any fee allowed by NRS 685A.155;

36-17     (c) Any policy fee;

36-18     (d) Any membership fee; [and]

36-19     (e) Any inspection fee; and

36-20     (f) Any other fees or assessments charged by the insurer as

36-21  consideration for the insurance.

36-22  Premium does not include any additional amount charged for state

36-23  or federal tax, or for filing affidavits or reports of coverage . [,

36-24  inspection fee or the communication expenses of the broker.]

36-25     3.  If a contract for surplus lines insurance covers risks or

36-26  exposures only partially in this state, the tax so payable must be

36-27  computed on that portion of the premium properly allocable to the

36-28  risks or exposures located in this state. The Commissioner may

36-29  adopt regulations which establish standards for allocating premiums

36-30  for risks located in this state in the same manner as premiums are

36-31  allocated pursuant to NRS 680B.030.

36-32     4.  The Commissioner shall promptly deposit all taxes collected

36-33  by him pursuant to this section with the State Treasurer, to the credit

36-34  of the State General Fund.

36-35     5.  A broker who receives a credit for tax paid shall refund to

36-36  each insured the amount of the credit attributable to the insured

36-37  when the insurer pays a return premium or within 30 days,

36-38  whichever is earlier.

36-39     Sec. 40.  NRS 685B.080 is hereby amended to read as follows:

36-40     685B.080  1.  Any unauthorized insurer who transacts any

36-41  unauthorized act of an insurance business as set forth in the

36-42  Unauthorized Insurers Act may be fined not more than $10,000 for

36-43  each act or violation.

36-44     2.  In addition to any other penalties provided in this Code:

37-1      (a) Any producer of insurance or surplus lines broker licensed

37-2  in this state who in this state knowingly represents or aids an

37-3  unauthorized insurer in violation of the Unauthorized Insurers

37-4  Act is guilty of a category C felony and shall be punished as

37-5  provided in NRS 193.130.

37-6      (b) Any person other than a producer of insurance or surplus

37-7  lines broker licensed in this state who in this state represents or

37-8  aids an unauthorized insurer in violation of the Unauthorized

37-9  Insurers Act is guilty of a category C felony and shall be punished

37-10  as provided in NRS 193.130.

37-11     (c) Any person who commits a second or subsequent violation

37-12  of this section is guilty of a category B felony and shall be

37-13  punished by imprisonment in the state prison for a minimum term

37-14  of not less than 1 year and a maximum term of not more than 20

37-15  years.

37-16     3.  In addition to the penalties provided in subsection 2, such

37-17  a violator is liable, personally, jointly and severally with any other

37-18  person liable therefor, for the payment of premium taxes at the

37-19  same rate of tax as imposed by law on the premiums of similar

37-20  coverages written by authorized insurers.

37-21     Sec. 41.  Chapter 686B of NRS is hereby amended by adding

37-22  thereto the provisions set forth as sections 42 to 46, inclusive, of this

37-23  act.

37-24     Sec. 42.  As used in sections 42 to 46, inclusive, of this act,

37-25  unless the context otherwise requires, “insured” has the meaning

37-26  ascribed to it in NRS 686B.260.

37-27     Sec. 43.  The provisions of NRS 81.130 and 81.510 do not

37-28  apply to the conversion of an essential insurance association to a

37-29  domestic mutual insurer or a domestic reciprocal insurer as

37-30  provided in sections 42 to 46, inclusive, of this act.

37-31     Sec. 44.  1.  An essential insurance association shall, if

37-32  requested to do so by the Commissioner, file a notice of intent to

37-33  qualify as a domestic mutual insurer or a domestic reciprocal

37-34  insurer. In the absence of a request by the Commissioner, an

37-35  essential insurance association may file such a notice at such time

37-36  as the association determines appropriate.

37-37     2.  The notice must be filed with the Commissioner at least 4

37-38  months before the date the association is to become a domestic

37-39  mutual insurer or a domestic reciprocal insurer and must include:

37-40     (a) An application prepared pursuant to chapter 680A of NRS

37-41  for a certificate of authority to transact business in Nevada as a

37-42  domestic mutual insurer or a domestic reciprocal insurer;

37-43     (b) A valuation of the policyholder’s surplus according to both

37-44  market and amortized value based on the association’s annual

37-45  financial statement for the previous year; and

38-1      (c) A provision for the return of any unused portion of the

38-2  insured’s capital stabilization charges.

38-3      Sec. 45.  1.  At the time the association files a notice of

38-4  intent to qualify as a domestic mutual insurer or domestic

38-5  reciprocal insurer, it must give a notice of intent to all

38-6  participating insurers and all insureds on a form approved by the

38-7  Commissioner.

38-8      2.  Any participating insurer or insured may, within 30 days

38-9  after the date of the notice, apply to the Division for a hearing

38-10  concerning the association’s ability to qualify as a domestic

38-11  mutual insurer or domestic reciprocal insurer.

38-12     3.  An association must comply with the provisions of:

38-13     (a) Chapter 692B of NRS, as applicable to mutual insurers, to

38-14  qualify as a domestic mutual insurer; or

38-15     (b) Chapter 694B of NRS, as applicable to reciprocal insurers,

38-16  to qualify as a domestic reciprocal insurer.

38-17     Sec. 46.  Upon determining that an association has complied

38-18  with sections 42 to 46, inclusive, of this act and all other

38-19  requirements applicable to domestic mutual insurers, if the

38-20  association is qualifying as a domestic mutual insurer, or to

38-21  domestic reciprocal insurers, if the association is qualifying as a

38-22  domestic reciprocal insurer, the Commissioner may issue to the

38-23  association a certificate of authority to transact business as a

38-24  domestic mutual insurer or a domestic reciprocal insurer.

38-25     Sec. 47.  NRS 686B.030 is hereby amended to read as follows:

38-26     686B.030  1.  Except as otherwise provided in subsection 2,

38-27  NRS 686B.010 to 686B.1799, inclusive, apply to all kinds and lines

38-28  of direct insurance written on risks or operations in this state by any

38-29  insurer authorized to do business in this state, except:

38-30     (a) Ocean marine insurance;

38-31     (b) Contracts issued by fraternal benefit societies;

38-32     (c) Life insurance and credit life insurance;

38-33     (d) Variable and fixed annuities;

38-34     (e) Group and blanket health insurance and credit health

38-35  insurance;

38-36     (f) Property insurance for business and commercial risks; [and]

38-37     (g) Casualty insurance for business and commercial risks other

38-38  than insurance covering the liability of a practitioner licensed

38-39  pursuant to chapters 630 to 640, inclusive, of NRS[.] ; and

38-40     (h) Surety insurance.

38-41     2.  The exclusions set forth in paragraphs (f) and (g) of

38-42  subsection 1 extend only to issues related to the determination or

38-43  approval of premium rates.

 

39-1      Sec. 48.  NRS 686B.1781 is hereby amended to read as

39-2  follows:

39-3      686B.1781  [NRS 686B.1751 to 686B.1799, inclusive, do not

39-4  prohibit or regulate the payment of dividends, savings, unearned

39-5  premiums deposits or an equivalent abatement of premiums allowed

39-6  or returned by insurers to their policyholders, members or

39-7  subscribers.]

39-8      1.  An insurer shall not unfairly discriminate among its

39-9  policyholders in paying a dividend[.] , savings, unearned premium

39-10  deposits or an equivalent abatement of premiums allowed or

39-11  returned by an insurer for a policy of industrial insurance.

39-12     2.  A plan for the payment of dividends [is not a rating system

39-13  or plan.] for industrial insurance must be filed before there is a

39-14  dividend payment. The plan shall be deemed approved unless the

39-15  Commissioner disapproves the plan within 30 days after it is filed

39-16  and received by the Commissioner. An insurer shall not condition

39-17  the payment of [such] a dividend upon the renewal of a policy or

39-18  contract by the policyholder, member or subscriber.

39-19     3.  An insurer paying savings, unearned premium deposits or

39-20  an equivalent abatement for premiums allowed or returned for a

39-21  policy of industrial insurance must receive prior approval.

39-22     Sec. 49.  NRS 686B.230 is hereby amended to read as follows:

39-23     686B.230  1.  The Nevada Essential Insurance Association

39-24  has, for purposes of this section and to the extent approved by the

39-25  Commissioner, the general powers and authority granted under the

39-26  laws of this state to carriers licensed to transact the kinds of

39-27  insurance defined in NRS 681A.020 to 681A.080, inclusive.

39-28     2.  The Association may take any necessary action to make

39-29  available necessary insurance, including , but not limited to , the

39-30  following:

39-31     (a) Assess participating insurers amounts necessary to pay the

39-32  obligations of the Association, administration expenses, the cost of

39-33  examinations conducted pursuant to NRS 687A.110 and other

39-34  expenses authorized by this chapter. The assessment of each

39-35  member insurer for the kind or kinds of insurance designated in the

39-36  plan [shall] must be in the proportion that the net direct written

39-37  premiums of the member insurer for the preceding calendar year

39-38  bear to the net direct written premiums of all member insurers for

39-39  the preceding calendar year. A member insurer may not be assessed

39-40  in any year an amount greater than 5 percent of his net direct written

39-41  premiums for the preceding calendar year. Each member insurer

39-42  [shall] must be allowed a premium tax credit at the rate of 20

39-43  percent per year for 5 successive years [following termination of the

39-44  Association.] beginning on the first day of the calendar year after

40-1  the calendar year in which the insurer pays the assessment

40-2  pursuant to this subsection.

40-3      (b) Enter into such contracts as are necessary or proper to carry

40-4  out the provisions and purposes of this section.

40-5      (c) Sue or be sued, including taking any legal action necessary

40-6  to recover any assessments for, on behalf of or against participating

40-7  carriers.

40-8      (d) Investigate claims brought against the fund and adjust,

40-9  compromise, settle and pay covered claims to the extent of the

40-10  association’s obligation and deny all other claims. Process claims

40-11  through its employees or through one or more member insurers or

40-12  other persons designated as servicing facilities. Designation of a

40-13  service facility is subject to the approval of the Commissioner , but

40-14  such a designation may be declined by a member insurer.

40-15     (e) Classify risks as may be applicable and equitable.

40-16     (f) Establish appropriate rates, rate classifications and rating

40-17  adjustments and file [such] those rates with the Commissioner in

40-18  accordance with this chapter.

40-19     (g) Administer any type of reinsurance program for or on behalf

40-20  of the Association or any participating carriers.

40-21     (h) Pool risks among participating carriers.

40-22     (i) Issue and market, through agents, policies of insurance

40-23  providing the coverage required by this section in its own name or

40-24  on behalf of participating carriers.

40-25     (j) Administer separate pools, separate accounts or other plans

40-26  as may be deemed appropriate for separate carriers or groups of

40-27  carriers.

40-28     (k) Invest, reinvest and administer all funds and moneys held by

40-29  the Association.

40-30     (l) Borrow funds needed by the Association to [effect] carry out

40-31  the purposes of this section.

40-32     (m) Develop, effectuate and promulgate any loss-prevention

40-33  programs aimed at the best interests of the Association and the

40-34  insuring public.

40-35     (n) Operate and administer any combination of plans, pools,

40-36  reinsurance arrangements or other mechanisms as deemed

40-37  appropriate to best accomplish the fair and equitable operation of

40-38  the Association for the purposes of making available essential

40-39  insurance coverage.

40-40     3.  In providing for the recoupment of a deficit of the

40-41  Association, an option [shall] must be offered to an insured each

40-42  policy year to pay a capital stabilization charge which [shall] must

40-43  not exceed 100 percent of the premium charged to the insured in

40-44  that year. The Board of Directors shall determine the amount of the

40-45  charge from appropriate factors of loss experience and risk

41-1  associated with the Association and the insured. An insured who

41-2  pays the stabilization charge [shall] must not be required to pay any

41-3  assessment to recoup a deficit of the Association incurred in any

41-4  policy year for which the charge is paid. The Association’s plan of

41-5  operation [shall] must provide for the return to the insured of so

41-6  much of his payment as remains after all actual or potential

41-7  liabilities under the policy have been discharged.

41-8      Sec. 50.  NRS 686B.240 is hereby amended to read as follows:

41-9      686B.240  The Commissioner and the Nevada Essential

41-10  Insurance Association may:

41-11     1.  Give consideration to the need for adequate and readily

41-12  accessible coverage, to alternative methods of improving the market

41-13  affected, to the preferences of the insurers and agents, to the

41-14  inherent limitations of the insurance mechanism, to the need for

41-15  reasonable underwriting standards and to the requirement of

41-16  reasonable loss-prevention measures.

41-17     2.  Establish procedures that will create minimum interference

41-18  with the voluntary market.

41-19     3.  Spread the burden imposed by the facility equitably and

41-20  efficiently.

41-21     4.  Establish procedures for applicants and participants to have

41-22  grievances reviewed.

41-23     5.  Take all reasonable and necessary steps to dissolve the

41-24  Association at the earliest date when essential insurance becomes

41-25  readily available in the private market. The dissolution of the

41-26  Association, including its assets and liabilities, [shall] must be

41-27  accomplished under the supervision of the Commissioner in an

41-28  equitable and reasonable manner. The dissolution must, if

41-29  determined to be appropriate by the Commissioner, provide for the

41-30  repayment of any loans or other money provided or contributed by

41-31  the State of Nevada for the formation or continuance of the

41-32  Association.

41-33     Sec. 51.  NRS 686B.290 is hereby amended to read as follows:

41-34     686B.290  1.  At the time the Association files a notice of

41-35  intent to qualify as a domestic stock insurer, it must give notice of

41-36  its intent to all participating insurers and all insureds [in] on a form

41-37  approved by the Commissioner. The notice to each insured must

41-38  state the total amount of stock to be issued and the amount of shares

41-39  to which he is entitled.

41-40     2.  Any participating insurer or insured may, within 30 days

41-41  after the date of the notice, apply to the Division for a hearing

41-42  concerning the Association’s ability to qualify as a domestic insurer,

41-43  the valuation of capital and surplus , or the proposed number and

41-44  distribution of shares of stock.

 

42-1      Sec. 52.  NRS 686B.320 is hereby amended to read as follows:

42-2      686B.320  Upon determining that [an] the Association has

42-3  complied with NRS 686B.280 to 686B.310, inclusive, and all other

42-4  requirements applicable to domestic stock insurers, the

42-5  Commissioner may issue to the Association a certificate of authority

42-6  to transact business as a domestic stock insurer . [to become

42-7  effective the next following January 1.]

42-8      Sec. 53.  NRS 687A.033 is hereby amended to read as follows:

42-9      687A.033  1.  “Covered claim” means an unpaid claim or

42-10  judgment, including a claim for unearned premiums, which arises

42-11  out of and is within the coverage of an insurance policy to which

42-12  this chapter applies issued by an insurer which becomes an insolvent

42-13  insurer, if one of the following conditions exists:

42-14     (a) The claimant or insured, if a natural person, is a resident of

42-15  this state at the time of the insured event.

42-16     (b) The claimant or insured, if other than a natural person,

42-17  maintains its principal place of business in this state at the time of

42-18  the insured event.

42-19     (c) The property from which the first party property damage

42-20  claim arises is permanently located in this state.

42-21     (d) The claim is not a covered claim pursuant to the laws of any

42-22  other state and the premium tax imposed on the insurance policy is

42-23  payable in this state pursuant to NRS 680B.027.

42-24     2.  The term does not include:

42-25     (a) An amount that is directly or indirectly due a reinsurer,

42-26  insurer, insurance pool or underwriting association, as recovered by

42-27  subrogation, indemnity or contribution, or otherwise.

42-28     (b) That part of a loss which would not be payable because of a

42-29  provision for a deductible or a self-insured retention specified in the

42-30  policy.

42-31     (c) Except as otherwise provided in this paragraph, any claim

42-32  filed with the Association [after:

42-33         (1) Eighteen] :

42-34         (1) More than 18 months after the date of the order of

42-35  liquidation; or

42-36         (2) [The] After the final date set by the court for the filing of

42-37  claims against the liquidator or receiver of the insolvent

42-38  insurer,

42-39  whichever is earlier. The provisions of this paragraph do not apply

42-40  to a claim for workers’ compensation that is reopened pursuant to

42-41  the provisions of NRS 616C.390.

42-42     (d) A claim filed with the Association for a loss that is incurred

42-43  but is not reported to the Association before the expiration of the

42-44  period specified in subparagraph (1) or (2) of paragraph (c).

43-1      (e) An obligation to make a supplementary payment for

43-2  adjustment or attorney’s fees and expenses, court costs or interest

43-3  and bond premiums incurred by the insolvent insurer before the

43-4  appointment of a liquidator, unless the expenses would also be a

43-5  valid claim against the insured.

43-6      (f) A first party or third party claim brought by or against an

43-7  insured, if the aggregate net worth of the insured and any affiliate of

43-8  the insured, as determined on a consolidated basis, is more than

43-9  $25,000,000 on December 31 of the year immediately preceding the

43-10  date the insurer becomes an insolvent insurer. The provisions of this

43-11  paragraph do not apply to a claim for workers’ compensation. As

43-12  used in this paragraph, “affiliate” means a person who directly or

43-13  indirectly owns or controls, is owned or controlled by, or is under

43-14  common ownership or control with, another person. For the

43-15  purpose of this definition, the terms “owns,” “is owned” and

43-16  “ownership” mean ownership of an equity interest, or the

43-17  equivalent thereof, of 10 percent or more.

43-18     Sec. 54.  NRS 687A.060 is hereby amended to read as follows:

43-19     687A.060  1.  The Association:

43-20     (a) Is obligated to the extent of the covered claims existing

43-21  before the determination of insolvency and arising within 30 days

43-22  after the determination of insolvency, or before the expiration date

43-23  of the policy if that date is less than 30 days after the determination,

43-24  or before the insured replaces the policy or on request cancels

43-25  the policy if he does so within 30 days after the determination. The

43-26  obligation of the Association to pay a covered claim is limited to the

43-27  payment of:

43-28         (1) The entire amount of the claim, if the claim is for

43-29  workers’ compensation pursuant to the provisions of chapters 616A

43-30  to 616D, inclusive, or chapter 617 of NRS;

43-31         (2) [More than $100 but not] Not more than $300,000 for

43-32  each policy[,] if the claim is for the return of unearned premiums;

43-33  or

43-34         (3) The limit specified in a policy or $300,000, whichever is

43-35  less, for each occurrence for any covered claim other than a covered

43-36  claim specified in subparagraph (1) or (2).

43-37     (b) Shall be deemed the insurer to the extent of its obligations on

43-38  the covered claims and to that extent has any rights, duties and

43-39  obligations of the insolvent insurer as if the insurer had not become

43-40  insolvent. The rights include, without limitation, the right to seek

43-41  and obtain any recoverable salvage and to subrogate a covered

43-42  claim, to the extent that the Association has paid its obligation under

43-43  the claim.

43-44     (c) Shall assess member insurers amounts necessary to pay the

43-45  obligations of the Association pursuant to paragraph (a) after an

44-1  insolvency, the expenses of handling covered claims subsequent to

44-2  an insolvency, the cost of examinations pursuant to NRS 687A.110

44-3  [,] and other expenses authorized by this chapter. The assessment of

44-4  each member insurer must be in the proportion that the net direct

44-5  written premiums of the member insurer for the calendar year

44-6  preceding the assessment bear to the net direct written premiums of

44-7  all member insurers for the same calendar year. Each member

44-8  insurer must be notified of the assessment not later than 30 days

44-9  before it is due. No member insurer may be assessed in any year an

44-10  amount greater than 2 percent of the net direct written premiums of

44-11  that member insurer for the calendar year preceding the assessment.

44-12  If the maximum assessment, together with the other assets of the

44-13  Association, does not provide in any 1 year an amount sufficient to

44-14  make all necessary payments, the money available may be prorated

44-15  and the unpaid portion must be paid as soon as money becomes

44-16  available. The Association may pay claims in any order, including

44-17  the order in which the claims are received or in groups or categories.

44-18  The Association may exempt or defer, in whole or in part, the

44-19  assessment of any member insurer if the assessment would cause the

44-20  financial statement of the member insurer to reflect amounts of

44-21  capital or surplus less than the minimum amounts required for a

44-22  certificate of authority by any jurisdiction in which the member

44-23  insurer is authorized to transact insurance. During the period of

44-24  deferment, no dividends may be paid to shareholders or

44-25  policyholders. Deferred assessments must be paid when payment

44-26  will not reduce capital or surplus below required minimums.

44-27  Payments must be refunded to those companies receiving larger

44-28  assessments because of deferment, or, in the discretion of the

44-29  company, credited against future assessments. Each member insurer

44-30  must be allowed a premium tax credit for any amounts paid pursuant

44-31  to the provisions of this chapter:

44-32         (1) For assessments made before January 1, 1993, at the rate

44-33  of 10 percent per year for 10 successive years beginning March 1,

44-34  1996; or

44-35         (2) For assessments made on or after January 1, 1993, at the

44-36  rate of 20 percent per year for 5 successive years beginning with the

44-37  calendar year following the calendar year in which the assessments

44-38  are paid.

44-39     (d) Shall investigate claims brought against the fund and adjust,

44-40  compromise, settle and pay covered claims to the extent of the

44-41  obligation of the Association and deny any other claims.

44-42     (e) Shall notify such persons as the Commissioner directs

44-43  pursuant to paragraph (a) of subsection 2 of NRS 687A.080.

44-44     (f) Shall act on claims through its employees or through one or

44-45  more member insurers or other persons designated as servicing

45-1  facilities. Designation of a servicing facility is subject to the

45-2  approval of the Commissioner, but the designation may be declined

45-3  by a member insurer.

45-4      (g) Shall reimburse each servicing facility for obligations of

45-5  the Association paid by the facility and for expenses incurred by the

45-6  facility while handling claims on behalf of the Association[,] and

45-7  pay the other expenses of the Association authorized by this chapter.

45-8      2.  The Association may:

45-9      (a) Appear in, defend and appeal any action on a claim brought

45-10  against the Association.

45-11     (b) Employ or retain persons necessary to handle claims and

45-12  perform other duties of the Association.

45-13     (c) Borrow money necessary to carry out the purposes of this

45-14  chapter in accordance with the plan of operation.

45-15     (d) Sue or be sued.

45-16     (e) Negotiate and become a party to contracts necessary to carry

45-17  out the purposes of this chapter.

45-18     (f) Perform other acts necessary or proper to effectuate the

45-19  purposes of this chapter.

45-20     (g) If, at the end of any calendar year, the Board of Directors

45-21  finds that the assets of the Association exceed its liabilities as

45-22  estimated by the Board of Directors for the coming year, refund to

45-23  the member insurers in proportion to the contribution of each that

45-24  amount by which the assets of the Association exceed the liabilities.

45-25     (h) Assess each member insurer equally not more than $100 per

45-26  year for administrative expenses not related to the insolvency of any

45-27  insurer.

45-28     Sec. 55.  NRS 687A.090 is hereby amended to read as follows:

45-29     687A.090  1.  Any person recovering under this chapter shall

45-30  be deemed to have assigned his rights under the policy to the

45-31  Association to the extent of his recovery from the Association.

45-32  Every insured or claimant seeking the protection of this chapter

45-33  shall cooperate with the Association to the same extent as [such] the

45-34  person would have been required to cooperate with the insolvent

45-35  insurer. [The Association shall have no] Except as otherwise

45-36  provided in subsection 2, the Association does not have a cause of

45-37  action against the insured of the insolvent insurer for any sums it has

45-38  paid out.

45-39     2.  The Association may recover the amount of money paid to

45-40  or on behalf of an insured of an insolvent insurer:

45-41     (a) If the aggregate net worth of the insured and any affiliate

45-42  of the insured, as determined on a consolidated basis, is more than

45-43  $25,000,000 on December 31 of the year immediately preceding

45-44  the date the insurer becomes an insolvent insurer; or

45-45     (b) If the Association paid the money in error.

46-1      3.  The receiver, liquidator or statutory successor of an

46-2  insolvent insurer [shall be] is bound by any settlements of covered

46-3  claims by the Association or a similar organization in another state.

46-4  The court having jurisdiction shall grant [such] those claims priority

46-5  equal to that to which the claimant would have been entitled in the

46-6  absence of this chapter against the assets of the insolvent insurer.

46-7  The expenses of the Association or similar organization in handling

46-8  claims [shall] must be accorded the same priority as the liquidator’s

46-9  expenses.

46-10     [3.] 4.  The Association shall periodically file with the receiver

46-11  or liquidator of the insolvent insurer statements of the covered

46-12  claims paid by the Association and estimates of anticipated claims

46-13  on the Association, which statements shall preserve the rights of the

46-14  Association against the assets of the insolvent insurer.

46-15     5.  As used in this section, “affiliate” means a person who

46-16  directly or indirectly owns or controls, is owned or controlled by,

46-17  or is under common ownership or control with, another person.

46-18  For the purpose of this definition, the terms “owns,” “is owned”

46-19  and “ownership” mean ownership of an equity interest, or the

46-20  equivalent thereof, of 10 percent or more.

46-21     Sec. 55.2. Chapter 687B of NRS is hereby amended by adding

46-22  thereto a new section to read as follows:

46-23     1.  No policy of industrial insurance that has been in effect for

46-24  at least 70 days or that has been renewed may be cancelled by the

46-25  insurer before the expiration of the agreed term or 1 year from the

46-26  effective date of the policy or renewal, whichever occurs first,

46-27  except on any one of the following grounds:

46-28     (a) A failure by the policyholder to pay a premium for the

46-29  policy of industrial insurance when due;

46-30     (b) A failure by the policyholder to:

46-31         (1) Report any payroll;

46-32         (2) Allow the insurer to audit any payroll in accordance

46-33  with the terms of the policy or any previous policy issued by the

46-34  insurer; or

46-35         (3) Pay any additional premium charged because of an

46-36  audit of any payroll as required by the terms of the policy or any

46-37  previous policy issued by the insurer;

46-38     (c) A material failure by the policyholder to comply with any

46-39  federal or state order concerning safety or any written

46-40  recommendation of the insurer’s designated representative for loss

46-41  control;

46-42     (d) A material change in ownership of the policyholder or any

46-43  change in the policyholder’s business or operations that:

46-44         (1) Materially increases the hazard for frequency or

46-45  severity of loss;

47-1          (2) Requires additional or different classifications for the

47-2  calculation of premiums; or

47-3          (3) Contemplates an activity that is excluded by any

47-4  reinsurance treaty of the insurer;

47-5      (e) A material misrepresentation made by the policyholder; or

47-6      (f) A failure by the policyholder to cooperate with the insurer

47-7  in conducting an investigation of a claim.

47-8      2.  An insurer shall not cancel a policy of industrial insurance

47-9  pursuant to paragraph (a), (b), (e) or (f) of subsection 1 except

47-10  upon 10 days’ written notice submitted by the insurer to the

47-11  policyholder.

47-12     3.  Except as otherwise provided in this subsection, an insurer

47-13  shall not cancel a policy of industrial insurance pursuant to

47-14  paragraph (c) or (d) of subsection 1 except upon 30 days’ written

47-15  notice by the insurer to the policyholder. An insurer is not

47-16  required to provide a written notice to a policyholder pursuant to

47-17  this subsection if the policyholder and the insurer consent to the

47-18  cancellation of the policy of industrial insurance and to the

47-19  reissuance of another policy of industrial insurance effective upon

47-20  a material change in the ownership or operations of the insured. If

47-21  the policyholder corrects the condition to the satisfaction of the

47-22  insurer within the period specified in the policy of insurance, the

47-23  insurer shall not cancel the policy.

47-24     4.  Any written notice submitted to a policyholder pursuant to

47-25  this section must be given by first class mail addressed to the

47-26  policyholder at the address of the policyholder set forth in the

47-27  policy of industrial insurance. Evidence indicating that a written

47-28  notice specified in this section has been mailed is sufficient proof

47-29  of notice.

47-30     5.  The provisions of this section do not prohibit, during any

47-31  period in which a policy of industrial insurance is in force, any

47-32  change in the premium rate required or authorized by any law,

47-33  regulation or order of the Commissioner, or otherwise agreed

47-34  upon by the policyholder and the insurer.

47-35     6.  For the purposes of this section, any policy of industrial

47-36  insurance that is written for a term of more than 1 year, or any

47-37  policy of industrial insurance with no fixed date of expiration,

47-38  shall be deemed to be written for successive periods of 1 year.

47-39     Sec. 55.4.  NRS 687B.145 is hereby amended to read as

47-40  follows:

47-41     687B.145  1.  Any policy of insurance or endorsement

47-42  providing coverage under the provisions of NRS 690B.020 or other

47-43  policy of casualty insurance may provide that if the insured has

47-44  coverage available to him under more than one policy or provision

47-45  of coverage, any recovery or benefits may equal but not exceed the

48-1  higher of the applicable limits of the respective coverages, and the

48-2  recovery or benefits must be prorated between the applicable

48-3  coverages in the proportion that their respective limits bear to the

48-4  aggregate of their limits. Any provision which limits benefits

48-5  pursuant to this section must be in clear language and be

48-6  prominently displayed in the policy, binder or endorsement. Any

48-7  limiting provision is void if the named insured has purchased

48-8  separate coverage on the same risk and has paid a premium

48-9  calculated for full reimbursement under that coverage.

48-10     2.  Except as otherwise provided in subsection 5, insurance

48-11  companies transacting motor vehicle insurance in this state must

48-12  offer, on a form approved by the Commissioner, uninsured and

48-13  underinsured vehicle coverage in an amount equal to the limits of

48-14  coverage for bodily injury sold to an insured under a policy of

48-15  insurance covering the use of a passenger car. The insurer is not

48-16  required to reoffer the coverage to the insured in any replacement,

48-17  reinstatement, substitute or amended policy, but the insured may

48-18  purchase the coverage by requesting it in writing from the insurer.

48-19  Each renewal must include a copy of the form offering such

48-20  coverage. Uninsured and underinsured vehicle coverage must

48-21  include a provision which enables the insured to recover up to the

48-22  limits of his own coverage any amount of damages for bodily injury

48-23  from his insurer which he is legally entitled to recover from the

48-24  owner or operator of the other vehicle to the extent that those

48-25  damages exceed the limits of the coverage for bodily injury carried

48-26  by that owner or operator. If an insured suffers actual damages

48-27  subject to the limitation of liability provided pursuant to NRS

48-28  41.035, underinsured vehicle coverage must include a provision

48-29  which enables the insured to recover up to the limits of his own

48-30  coverage any amount of damages for bodily injury from his

48-31  insurer for the actual damages suffered by the insured that exceed

48-32  that limitation of liability.

48-33     3.  An insurance company transacting motor vehicle insurance

48-34  in this state must offer an insured under a policy covering the use of

48-35  a passenger car, the option of purchasing coverage in an amount of

48-36  at least $1,000 for the payment of reasonable and necessary medical

48-37  expenses resulting from an accident. The offer must be made on a

48-38  form approved by the Commissioner. The insurer is not required to

48-39  reoffer the coverage to the insured in any replacement,

48-40  reinstatement, substitute or amended policy, but the insured may

48-41  purchase the coverage by requesting it in writing from the insurer.

48-42  Each renewal must include a copy of the form offering such

48-43  coverage.

48-44     4.  An insurer who makes a payment to an injured person on

48-45  account of underinsured vehicle coverage as described in subsection

49-1  2 is not entitled to subrogation against the underinsured motorist

49-2  who is liable for damages to the injured payee. This subsection does

49-3  not affect the right or remedy of an insurer under subsection 5 of

49-4  NRS 690B.020 with respect to uninsured vehicle coverage. As used

49-5  in this subsection, “damages” means the amount for which the

49-6  underinsured motorist is alleged to be liable to the claimant in

49-7  excess of the limits of bodily injury coverage set by the

49-8  underinsured motorist’s policy of casualty insurance.

49-9      5.  An insurer need not offer, provide or make available

49-10  uninsured or underinsured vehicle coverage in connection with a

49-11  general commercial liability policy, an excess policy, an umbrella

49-12  policy or other policy that does not provide primary motor vehicle

49-13  insurance for liabilities arising out of the ownership, maintenance,

49-14  operation or use of a specifically insured motor vehicle.

49-15     6.  As used in this section:

49-16     (a) “Excess policy” means a policy that protects a person against

49-17  loss in excess of a stated amount or in excess of coverage provided

49-18  pursuant to another insurance contract.

49-19     (b) “Passenger car” has the meaning ascribed to it in NRS

49-20  482.087.

49-21     (c) “Umbrella policy” means a policy that protects a person

49-22  against losses in excess of the underlying amount required to be

49-23  covered by other policies.

49-24     Sec. 55.6. NRS 687B.310 is hereby amended to read as

49-25  follows:

49-26     687B.310  1.  NRS 687B.310 to 687B.420, inclusive, and

49-27  section 55.2 of this act apply to all binders and all contracts of

49-28  insurance the general terms of which are required to be approved or

49-29  are subject to disapproval by the Commissioner, except as otherwise

49-30  provided by statute or by rule pursuant to subsection 3.

49-31     2.  The contract may provide terms more favorable to

49-32  policyholders than are required by NRS 687B.310 to 687B.420,

49-33  inclusive [.] , and section 55.2 of this act.

49-34     3.  The Commissioner may by rule exempt from NRS 687B.310

49-35  to 687B.420, inclusive, and section 55.2 of this act classes of

49-36  insurance contracts where the policyholders do not need protection

49-37  against arbitrary termination.

49-38     4.  The rights provided by NRS 687B.310 to 687B.420,

49-39  inclusive, and section 55.2 of this act are in addition to and do not

49-40  prejudice any other rights the policyholder may have at common

49-41  law or under other statutes.

49-42     5.  NRS 687B.310 to 687B.420, inclusive, and section 55.2 of

49-43  this act do not prevent the rescission or reformation of any life or

49-44  health insurance contract not otherwise denied by the terms of the

49-45  contract or by any other statute.

50-1      6.  Any notice to an insured required pursuant to NRS

50-2  687B.320 to 687B.350, inclusive, and section 55.2 of this act must

50-3  be personally delivered to the insured or mailed first class or

50-4  certified to the insured at his address last known by the insurer. The

50-5  notice must state the effective date of the cancellation or nonrenewal

50-6  and be accompanied by a written explanation of the specific reasons

50-7  for the cancellation or nonrenewal.

50-8      Sec. 55.8. NRS 687B.320 is hereby amended to read as

50-9  follows:

50-10     687B.320  1.  [No] Except as otherwise provided in

50-11  subsection 3, no insurance policy that has been in effect for at least

50-12  70 days or that has been renewed may be cancelled by the insurer

50-13  [prior to] before the expiration of the agreed term or 1 year from the

50-14  effective date of the policy or renewal, whichever [is less,] occurs

50-15  first, except on any one of the following grounds:

50-16     (a) Failure to pay a premium when due;

50-17     (b) Conviction of the insured of a crime arising out of acts

50-18  increasing the hazard insured against;

50-19     (c) Discovery of fraud or material misrepresentation in the

50-20  obtaining of the policy or in the presentation of a claim thereunder;

50-21     (d) Discovery of:

50-22         (1) An act or omission; or

50-23         (2) A violation of any condition of the policy,

50-24  which occurred after the first effective date of the current policy and

50-25  substantially and materially increases the hazard insured against;

50-26     (e) A material change in the nature or extent of the risk,

50-27  occurring after the first effective date of the current policy, which

50-28  causes the risk of loss to be substantially and materially increased

50-29  beyond that contemplated at the time the policy was issued or last

50-30  renewed;

50-31     (f) A determination by the Commissioner that continuation of

50-32  the insurer’s present volume of premiums would jeopardize the

50-33  insurer’s solvency or be hazardous to the interests of policyholders

50-34  of the insurer, its creditors or the public; or

50-35     (g) A determination by the Commissioner that the continuation

50-36  of the policy would violate, or place the insurer in violation of, any

50-37  provision of the Code.

50-38     2.  No cancellation under subsection 1 is effective until in the

50-39  case of paragraph (a) of subsection 1 at least 10 days and in the case

50-40  of any other paragraph of subsection 1 at least 30 days after the

50-41  notice is delivered or mailed to the policyholder.

50-42     3.  The provisions of this section do not apply to a policy of

50-43  industrial insurance.

 

 

51-1      Sec. 56.  NRS 687B.350 is hereby amended to read as follows:

51-2      687B.350  1.  [An] Except as otherwise provided in

51-3  subsection 2, an insurer shall not renew a policy on different terms,

51-4  including different rates, unless the insurer notifies the insured in

51-5  writing of the different terms or rates at least 30 days before [those

51-6  terms or rates become effective.] the expiration of the policy. If the

51-7  insurer [offers or purports to] fails to provide adequate and timely

51-8  notice, the insurer shall renew the policy [but on different terms,

51-9  including different rates, the policyholder may, for 30 days after he

51-10  receives notice of the changes in the policy, cancel the policy. If he

51-11  elects to cancel, the insurer shall refund to him the excess of the

51-12  premium paid by him above the pro rata premium for the expired

51-13  portion of the new term.] at the expiring terms and rates:

51-14     (a) For a period that is equal to the expiring term if the agreed

51-15  term is 1 year or less; or

51-16     (b) For 1 year if the agreed term is more than 1 year.

51-17     2.  The provisions of this section do not apply to a policy of

51-18  industrial insurance.

51-19     Sec. 56.1. NRS 687B.360 is hereby amended to read as

51-20  follows:

51-21     687B.360  If a notice of cancellation or nonrenewal under NRS

51-22  687B.310 to 687B.420, inclusive, and section 55.2 of this act does

51-23  not state with reasonable precision the facts on which the insurer’s

51-24  decision is based, the insurer shall supply that information within 6

51-25  days after receipt of a written request by the policyholder. No notice

51-26  is effective unless it contains adequate information about the

51-27  policyholder’s right to make such a request.

51-28     Sec. 56.3. NRS 687B.370 is hereby amended to read as

51-29  follows:

51-30     687B.370  Except for a notice of cancellation for the failure to

51-31  pay a premium when due, no notice required pursuant to NRS

51-32  687B.310 to 687B.420, inclusive, and section 55.2 of this act is

51-33  effective unless it contains adequate instructions enabling the

51-34  policyholder to apply for insurance through any voluntary or

51-35  mandatory risk-sharing plan established pursuant to NRS 686B.180

51-36  and 686B.200 existing at the time of the notice, for which the

51-37  policyholder may be eligible.

51-38     Sec. 56.5. NRS 687B.380 is hereby amended to read as

51-39  follows:

51-40     687B.380  There is no liability on the part of and no cause of

51-41  action of any nature may arise against any insurer, its authorized

51-42  representative, its agents, its employees, or any person furnishing to

51-43  the insurer information as to reasons for cancellation or nonrenewal,

51-44  for any statement made by them in complying with NRS 687B.310

52-1  to 687B.420, inclusive, and section 55.2 of this act or for the

52-2  providing of information pertaining thereto.

52-3      Sec. 56.7. NRS 688A.361 is hereby amended to read as

52-4  follows:

52-5      688A.361  No contract of annuity may be delivered or issued

52-6  for delivery in this state unless it contains in substance the following

52-7  provisions, or corresponding provisions which in the opinion of the

52-8  Commissioner are at least as favorable to the contract holder:

52-9      1.  A statement that upon cessation of payment of

52-10  considerations under a contract, or upon receipt of a written request

52-11  submitted by an owner of a contract, the company willgrant a

52-12  paid-up annuity benefit on a plan stipulated in the contract of such

52-13  value as is specified in NRS 688A.3631 to 688A.3637, inclusive,

52-14  and 688A.366;

52-15     2.  If a contract provides for a lump-sum settlement at maturity

52-16  or any other time, a statement that upon surrender of the contract at

52-17  or before the commencement of any annuity payments, the company

52-18  will pay in lieu of any paid-up annuity benefit a cash surrender

52-19  benefit of an amount specified in NRS 688A.3631, 688A.3633,

52-20  688A.3637 and 688A.366, and that the company [reserves] may

52-21  reserve the right to defer the payment of such cash surrender benefit

52-22  for a period of not more than 6 months after demand therefor with

52-23  surrender of the contract [;] if the company submits a written

52-24  request to and receives written approval for the deferral from the

52-25  Commissioner. The request must address the necessity and

52-26  equitability to all policyholders of the deferral;

52-27     3.  A statement of the mortality table, if any, and interest rates

52-28  used in calculating any minimum paid-up annuity, cash surrender or

52-29  death benefits which are guaranteed under the contract, together

52-30  with sufficient information to determine the amounts of those

52-31  benefits; and

52-32     4.  A statement that any paid-up annuity, cash surrender or

52-33  death benefits which may be available under the contract are not less

52-34  than the minimum benefits required by any statute of the state in

52-35  which the contract is delivered and an explanation of the manner in

52-36  which such benefits are altered by the existence of any additional

52-37  amounts credited by the company to the contract, any indebtedness

52-38  to the company on the contract or any prior withdrawals from or

52-39  partial surrenders of the contract,

52-40  except that any deferred annuity contract may provide that if no

52-41  considerations have been received under a contract for a period of 2

52-42  full years, and the portion of the paid-up annuity benefit at maturity

52-43  on the plan stipulated in the contract arising from considerations

52-44  paid before that period would be less than $20 monthly, the

52-45  company may terminate the contract by payment in cash of the then

53-1  present value of such portion of the paid-up annuity benefit,

53-2  calculated on the basis of the mortality table, if any, and interest rate

53-3  specified in the contract for determining the paid-up annuity benefit,

53-4  and by such payment shall be relieved of any further obligation

53-5  under the contract.

53-6      Sec. 56.9. NRS 688A.363 is hereby amended to read as

53-7  follows:

53-8      688A.363  1.  The minimum values, specified in NRS

53-9  688A.3631 to 688A.3637, inclusive, and 688A.366, of any paid-up

53-10  annuity, cash surrender or death benefits available under an annuity

53-11  contract [shall] must be based upon minimum nonforfeiture

53-12  amounts as defined in this section.

53-13     [1.] 2. With respect to contracts providing for flexible

53-14  considerations, the minimum nonforfeiture amount for any time at

53-15  or before the commencement of any annuity payments is equal to an

53-16  accumulation up to such time at a rate of interest [of 3 percent per

53-17  annum of percentages of the net considerations paid before such

53-18  time,] calculated pursuant to subsection 3, which must be

53-19  decreased by the sum of:

53-20     (a) Any prior withdrawals from or partial surrenders of the

53-21  contract, accumulated at a rate of interest [of 3 percent per annum;

53-22  and] calculated pursuant to subsection 3;

53-23     (b) An annual charge in the amount of $50, accumulated at

53-24  rates of interest calculated pursuant to subsection 3;

53-25     (c) Any premium tax paid by the company for the contract,

53-26  accumulated at rates of interest calculated pursuant to subsection

53-27  3; and

53-28     (d) The amount of any indebtedness to the company on the

53-29  contract, including interest due and accrued . [, and increased by any

53-30  existing additional amounts credited by the company to the

53-31  contract.]

53-32  The net considerations for a given contract year used to define the

53-33  minimum nonforfeiture amount [shall] must be an amount [not less

53-34  than zero and shall be] that is equal to 87.5 percent of the

53-35  [corresponding] gross considerations credited to the contract during

53-36  that contract year . [less an annual contract charge of $30 and a

53-37  collection charge of $1.25 per consideration credited to the contract

53-38  during that contract year. The percentages of net considerations

53-39  shall be 65 percent of the net consideration for the first contract year

53-40  and 87.5 percent of the net considerations for the second and later

53-41  contract years, except that the percentage shall be 65 percent of the

53-42  portion of the total net consideration for any renewal contract year

53-43  which exceeds by not more than 2 times the sum of those portions of

53-44  the net considerations in all prior contract years for which the

53-45  percentage was 65 percent.

54-1      2.  With respect to contracts providing for fixed scheduled

54-2  considerations, minimum nonforfeiture amounts shall be calculated

54-3  on the assumption that considerations are paid annually in advance

54-4  and shall be defined as for contracts with flexible considerations

54-5  which are paid annually, with the following exceptions:

54-6      (a) The portion of the net consideration for the first contract year

54-7  to be accumulated shall be the sum of 65 percent of the net

54-8  consideration for the first contract year plus 22.5 percent of the

54-9  excess of the net consideration for the first contract year over the

54-10  lesser of the net considerations for the second and third contract

54-11  years.

54-12     (b) The annual contract charge shall be the lesser of:

54-13         (1) Thirty dollars; or

54-14         (2) Ten percent of the gross annual consideration.

54-15     3.  With respect to contracts providing for a single

54-16  consideration, minimum nonforfeiture amounts shall be defined as

54-17  for contracts with flexible considerations except that the percentage

54-18  of net consideration used to determine the minimum nonforfeiture

54-19  amount shall be equal to 90 percent and the net consideration shall

54-20  be the gross consideration less a contract charge of $75.]

54-21     3.  For the purpose of this section, the rate of interest used to

54-22  determine the minimum nonforfeiture amounts must be an annual

54-23  rate of interest determined as the lesser of 3 percent per annum or

54-24  a rate specified in the contract if the rate is calculated in

54-25  accordance with regulations adopted by the Commissioner, except

54-26  that at no time may the resulting rate be less than 1 percent per

54-27  annum.

54-28     Sec. 57.  NRS 690B.050 is hereby amended to read as follows:

54-29     690B.050  1.  Each insurer which issues a policy of insurance

54-30  covering the liability of a physician licensed under chapter 630 of

54-31  NRS or an osteopathic physician licensed under chapter 633 of NRS

54-32  for a breach of his professional duty toward a patient shall , within

54-33  30 days after a claim is closed under the policy, submit a report to

54-34  the Commissioner [within 30 days each settlement or award made or

54-35  judgment rendered by reason of a claim, giving the] concerning the

54-36  claim. The report must include, without limitation:

54-37     (a) The name and address of the claimant and [physician and]

54-38  the insured under the policy;

54-39     (b) A statement setting forth the circumstances of the case[.

54-40     2.] ;

54-41     (c) Information indicating whether any payment was made on

54-42  the claim and the amount of the payment, if any; and

54-43     (d) The information specified in subsection 2 of NRS

54-44  679B.144.

55-1      2.  An insurer who fails to comply with the provisions of

55-2  subsection 1 is subject to the imposition of an administrative fine

55-3  pursuant to NRS 679B.460.

55-4      3.  The Commissioner shall , within 30 days after receiving a

55-5  report from an insurer pursuant to this section, submit a report to

55-6  the Board of Medical Examiners or the state board of osteopathic

55-7  medicine, as applicable, [within 30 days after receiving the report of

55-8  the insurer, each claim made and each settlement, award or

55-9  judgment.] setting forth the information provided to the

55-10  Commissioner by the insurer pursuant to this section.

55-11     Sec. 57.5.  NRS 690B.100 is hereby amended to read as

55-12  follows:

55-13     690B.100  As used in NRS 690B.100 to 690B.180, inclusive,

55-14  unless the context otherwise requires:

55-15     1.  “Home” means a structure used primarily for residential

55-16  purposes and includes, without limitation:

55-17     (a) A single-family dwelling;

55-18     (b) A unit in a multiple-family structure;

55-19     (c) A mobile home; and

55-20     (d) The common elements of a common-interest community, as

55-21  defined in NRS 116.110318, and any appurtenance to the common

55-22  elements.

55-23     2.  “Insurance for home protection” means a contract of

55-24  insurance, which affords coverage over a specified term for a

55-25  predetermined fee, under which a person, other than the

55-26  manufacturer, builder, seller or lessor of the home, agrees to repair,

55-27  replace or indemnify from the cost of repair or replacement based

55-28  upon the failure of any structure, component, system or appliance of

55-29  the home. The term does not include [a] :

55-30     (a) A contract which insures against any consequential losses

55-31  caused by the defects or failures.

55-32     (b) An annual home service agreement on household

55-33  appliances, systems and components if the agreement principally

55-34  provides for service, repair or replacement due to normal wear

55-35  and tear or inherent defect. Such agreements may include

55-36  provisions for incidental indemnity or for service or repair of roof

55-37  leaks.

55-38     Sec. 58.  Chapter 692C of NRS is hereby amended by adding

55-39  thereto the provisions set forth as sections 59 to 65, inclusive, of this

55-40  act.

55-41     Sec. 59.  “Acquisition” means any agreement, arrangement

55-42  or activity, the consummation of which results in a person directly

55-43  or indirectly acquiring the control of another person. The term

55-44  includes, but is not limited to:

55-45     1.  The acquiring of a voting security;

56-1      2.  The acquiring of any asset;

56-2      3.  Bulk reinsurance; and

56-3      4.  A merger.

56-4      Sec. 60.  “Involved insurer” includes an insurer that:

56-5      1.  Acquires a person or is acquired by a person;

56-6      2.  Is affiliated with an insurer that acquires a person or is

56-7  acquired by a person; or

56-8      3.  Is the result of a merger.

56-9      Sec. 61.  The provisions of this chapter apply to any

56-10  acquisition in which a change in control of an insurer who is

56-11  authorized to do business in this state occurs, except:

56-12     1.  An acquisition that is subject to approval or disapproval by

56-13  the Commissioner pursuant to NRS 692C.180 to 692C.250,

56-14  inclusive.

56-15     2.  A purchase of securities solely for investment purposes if

56-16  the securities are not used for voting or not otherwise used to

56-17  cause or attempt to cause a substantial lessening of competition in

56-18  any insurance market in this state, except that, if a purchase of

56-19  securities creates a presumption of control of the insurer pursuant

56-20  to subsection 2 of NRS 692C.050, the purchase is not solely for

56-21  investment purposes unless the Commissioner of insurance of the

56-22  insurer’s state of domicile:

56-23     (a) Accepts a disclaimer of control or affirmatively finds that

56-24  control does not exist; and

56-25     (b) Submits the accepted disclaimer or a statement setting

56-26  forth the affirmative finding to the Commissioner.

56-27     3.  An acquisition of a person by another person if:

56-28     (a) Each of those persons is not directly or through an affiliate

56-29  primarily engaged in the business of insurance; and

56-30     (b) At least 30 days before the effective date of the acquisition,

56-31  a notice is filed with the Commissioner in accordance with section

56-32  62 of this act, if required.

56-33     4.  An acquisition by a person of an affiliate of that person.

56-34     5.  An acquisition that does not immediately cause:

56-35     (a) The combined market share of the involved insurers to

56-36  exceed 5 percent of the total market;

56-37     (b) An increase in any market share; or

56-38     (c) For any market:

56-39         (1) The combined market share of the involved insurers to

56-40  exceed 12 percent of the total market; and

56-41         (2) The market share to increase by more than 2 percent of

56-42  the total market.

56-43  As used in this subsection, “market” means direct written

56-44  premiums in this state for a line of authority set forth in the

57-1  annual statement required to be filed by insurers authorized to do

57-2  business in this state.

57-3      6.  An acquisition for which, solely because of the effect of the

57-4  acquisition on ocean marine insurance, a notification is required

57-5  pursuant to this section.

57-6      7.  An acquisition of an insurer whose domiciliary

57-7  commissioner of insurance:

57-8      (a) Determines that:

57-9          (1) The insurer is in a failing condition;

57-10         (2) A feasible alternative for improving that condition does

57-11  not exist; and

57-12         (3) The public benefit received from improving that

57-13  condition through the acquisition of the insurer outweighs the

57-14  public benefit received from increasing competition; and

57-15     (b) Submits his determination made pursuant to paragraph (a)

57-16  to the Commissioner.

57-17     Sec. 62.  1.  An acquisition to which the provisions of

57-18  section 61 of this act apply is subject to an order issued pursuant

57-19  to section 64 of this act unless:

57-20     (a) The acquiring person files a notice of acquisition pursuant

57-21  to this section; and

57-22     (b) The waiting period specified in subsection 4 has expired.

57-23     2.  The Commissioner shall prescribe the form of the notice

57-24  required pursuant to subsection 1. A notice of acquisition filed

57-25  pursuant to this section must include:

57-26     (a) The information required by the National Association of

57-27  Insurance Commissioners relating to any market that, pursuant to

57-28  subsection 5 of section 61 of this act, causes the acquisition not to

57-29  be exempted from the provisions of this section; and

57-30     (b) Any other material or information required by the

57-31  Commissioner to determine whether or not the proposed

57-32  acquisition, if consummated, would violate the provisions of

57-33  section 63 of this act.

57-34     3.  The information required pursuant to subsection 2 may

57-35  include the opinion of an economist relating to the competitive

57-36  effect of the acquisition on the business of insurance in this state

57-37  if the opinion is accompanied by a summary of the education and

57-38  experience of the economist and a statement indicating his ability

57-39  to provide an informed opinion.

57-40     4.  Except as otherwise provided in subsection 5, the waiting

57-41  period for an acquisition required pursuant to subsection 1 begins

57-42  on the date the Commissioner receives the notice filed pursuant to

57-43  subsection 1 and ends on the expiration of 30 days after that date

57-44  or on the expiration of a shorter period prescribed by the

57-45  Commissioner, whichever is earlier.

58-1      5.  Before the expiration of the waiting period specified in

58-2  subsection 4, the Commissioner may, not more than once, require

58-3  a person to submit additional information relating to the proposed

58-4  acquisition. If the Commissioner requires the submission of

58-5  additional information, the waiting period for the acquisition ends

58-6  upon the expiration of 30 days after the Commissioner receives the

58-7  additional information or upon the expiration of a shorter period

58-8  prescribed by the Commissioner, whichever is earlier.

58-9      Sec. 63.  1.  The Commissioner may issue an order pursuant

58-10  to section 64 of this act relating to an acquisition if:

58-11     (a) The effect of the acquisition may substantially lessen

58-12  competition in any line of insurance in this state or tend to create

58-13  a monopoly; or

58-14     (b) The acquiring person fails to file sufficient materials or

58-15  information pursuant to section 62 of this act.

58-16     2.  In determining whether to issue an order pursuant to

58-17  subsection 1, the Commissioner shall consider the standards set

58-18  forth in the Horizontal Merger Guidelines issued by the United

58-19  States Department of Justice and the Federal Trade Commission

58-20  and in effect at the time the Commissioner receives the notice

58-21  required pursuant to section 62 of this act.

58-22     3.  The Commissioner shall not issue an order specified in

58-23  subsection 1:

58-24     (a) If:

58-25         (1) The acquisition creates substantial economies of scale

58-26  or economies in the use of resources that may not be created in

58-27  any other manner; and

58-28         (2) The public benefit received from those economies

58-29  exceeds the public benefit received from not lessening

58-30  competition; or

58-31     (b) If:

58-32         (1) The acquisition substantially increases the availability

58-33  of insurance; and

58-34         (2) The public benefit received by that increase exceeds the

58-35  public benefit received from not lessening competition.

58-36     4.  The public benefits set forth in subparagraph 2 of

58-37  paragraphs (a) and (b) of subsection 3 may be considered

58-38  together, as applicable, in assessing whether the public benefits

58-39  received from the acquisition exceed any benefit to competition

58-40  that would arise from disapproving the acquisition.

58-41     5.  The Commissioner has the burden of establishing a

58-42  violation of the competitive standard set forth in subsection 1.

58-43     Sec. 64.  1.  Except as otherwise provided in this section, if

58-44  the Commissioner determines that an acquisition may

59-1  substantially lessen competition in any line of insurance in this

59-2  state or tends to create a monopoly, he may issue an order:

59-3      (a) Requiring an involved insurer to cease and desist from

59-4  doing business in this state relating to that line of insurance; or

59-5      (b) Denying the application of an acquired or acquiring

59-6  insurer for a license or authority to do business in this state.

59-7      2.  The Commissioner shall not issue an order pursuant to

59-8  subsection 1 unless:

59-9      (a) He conducts a hearing concerning the acquisition in

59-10  accordance with NRS 679B.310 to 679B.370, inclusive;

59-11     (b) A notice of the hearing is issued before the expiration of

59-12  the waiting period for the acquisition specified in section 62 of this

59-13  act, but not less than 15 days before the hearing; and

59-14     (c) The hearing is conducted and the order is issued not later

59-15  than 60 days after the expiration of the waiting period.

59-16     3.  Each order issued pursuant to subsection 1 must include a

59-17  written decision of the Commissioner setting forth his findings of

59-18  fact and conclusions of law relating to the acquisition.

59-19     4.  An order issued pursuant to this section does not become

59-20  final until 30 days after it is issued, during which time the involved

59-21  insurer may submit to the Commissioner a plan to remedy, within

59-22  a reasonable period, the anticompetitive effect of the acquisition.

59-23  As soon as practicable after receiving the plan, the Commissioner

59-24  shall, based upon the plan and any information included in the

59-25  plan, issue a written determination setting forth:

59-26     (a) The conditions or actions, if any, required to:

59-27         (1) Eliminate the anticompetitive effect of the acquisition;

59-28  and

59-29         (2) Vacate or modify the order; and

59-30     (b) The period in which the conditions or actions specified in

59-31  paragraph (a) must be performed.

59-32     5.  An order issued pursuant to subsection 1 does not apply to

59-33  an acquisition that is not consummated.

59-34     6.  A person who violates a cease and desist order issued

59-35  pursuant to this section during any period in which the order is in

59-36  effect is subject, at the discretion of the Commissioner, to:

59-37     (a) The imposition of a civil penalty of not more than $10,000

59-38  per day for each day the violation continues;

59-39     (b) The suspension or revocation of the person’s license or

59-40  certificate of authority; or

59-41     (c) Both the imposition of a civil penalty pursuant to

59-42  paragraph (a) and the suspension or revocation of the person’s

59-43  license or certificate of authority pursuant to paragraph (b).

59-44     7.  In addition to any fine imposed pursuant to NRS

59-45  692C.480, any insurer or other person who fails to make any filing

60-1  required by sections 61 to 64, inclusive, of this act and who fails to

60-2  make a good faith effort to comply with any such requirement is

60-3  subject to a fine of not more than $50,000.

60-4      8.  The provisions of NRS 692C.430, 692C.440 and 692C.460

60-5  do not apply to an acquisition to which the provisions of section 61

60-6  of this act apply.

60-7      Sec. 65.  1.  A director or officer of an insurance holding

60-8  company system who knowingly violates, or knowingly participates

60-9  in or assents to a violation of, NRS 692C.350, 692C.360, 692C.363

60-10  or 692C.390, or who knowingly permits any officer or agent of the

60-11  insurance holding company to engage in a transaction in violation

60-12  of NRS 692C.360 or 692C.363 or to pay a dividend or make an

60-13  extraordinary distribution in violation of NRS 692C.390 shall pay,

60-14  after receiving notice and a hearing before the Commissioner, a

60-15  fine of not more than $10,000 for each violation. In determining

60-16  the amount of the fine, the Commissioner shall consider the

60-17  appropriateness of the fine in relation to:

60-18     (a) The gravity of the violation;

60-19     (b) The history of any previous violations committed by the

60-20  director or officer; and

60-21     (c) Any other matters as justice may require.

60-22     2.  Whenever it appears to the Commissioner that an insurer

60-23  or any director, officer, employee or agent of the insurer has

60-24  engaged in a transaction or entered into a contract to which the

60-25  provisions of NRS 692C.363 apply and for which the insurer has

60-26  not obtained the Commissioner’s approval, the Commissioner may

60-27  order the insurer to cease and desist immediately from engaging in

60-28  any further activity relating to the transaction or contract. In

60-29  addition to issuing such an order, the Commissioner may order

60-30  the insurer to rescind the contract and return each party to the

60-31  contract to the position he was in before the execution of the

60-32  contract if the issuing of the order is in the best interest of:

60-33     (a) The policyholders or creditors of the insurer; or

60-34     (b) The members of the general public.

60-35     Sec. 66.  NRS 692C.020 is hereby amended to read as follows:

60-36     692C.020  As used in this chapter, unless the context otherwise

60-37  requires, the words and terms defined in NRS 692C.030 to

60-38  692C.110, inclusive, and sections 59 and 60 of this act, have the

60-39  meanings ascribed to them in those sections.

60-40     Sec. 67.  NRS 692C.080 is hereby amended to read as follows:

60-41     692C.080  “Person” includes an individual, corporation,

60-42  limited-liability company, partnership, association, joint stock

60-43  company, trust, unincorporated organization or any similar entity,

60-44  or any combination thereof acting in concert. The term does not

60-45  include [any] :

61-1      1.  Any joint venture partnership that is exclusively engaged

61-2  in owning, managing, leasing or developing any real or tangible

61-3  personal property; or

61-4      2.  Any securities broker performing no more than the usual and

61-5  customary broker’s function.

61-6      Sec. 68.  NRS 692C.140 is hereby amended to read as follows:

61-7      692C.140  In addition to making investments in common stock,

61-8  preferred stock, debt obligations and other securities permitted

61-9  under chapter 682A of NRS, a domestic insurer may invest:

61-10     1.  In common stock, preferred stock, debt obligations and other

61-11  securities of one or more subsidiaries, amounts which do not exceed

61-12  the lesser of 10 percent of the insurer’s assets or 50 percent of its

61-13  surplus as regards policyholders, if the insurer’s surplus as regards

61-14  policyholders remains at a reasonable level in relation to the

61-15  insurer’s outstanding liabilities and adequate to its financial needs.

61-16  In calculating the amount of such investments, the following must

61-17  be included:

61-18     (a) Total money or other consideration expended and obligations

61-19  assumed in the acquisition or formation of a subsidiary, including all

61-20  organizational expenses and contributions to capital and surplus of

61-21  the subsidiary whether or not represented by the purchase of capital

61-22  stock or issuance of other securities; and

61-23     (b) All amounts expended in acquiring additional common

61-24  stock, preferred stock, debt obligations and other securities and all

61-25  contributions to the capital or surplus of a subsidiary after its

61-26  acquisition or formation.

61-27     2.  Any amount in common stock, preferred stock, debt

61-28  obligations and other securities of one or more subsidiaries, if [the

61-29  insurer’s total liabilities, as calculated for the National Association

61-30  of Insurance Commissioners’ annual statement purposes, are less

61-31  than 10 percent of assets and if the insurer’s surplus remains as

61-32  regards policyholders, considering such investment as if it were a

61-33  disallowed asset, at a reasonable level in relation to the insurer’s

61-34  outstanding liabilities and adequate to its financial needs.

61-35     3.  Any amount in common stock, preferred stock, debt

61-36  obligations and other securities of one or more subsidiaries if] each

61-37  subsidiary agrees to limit its investments in any asset so that those

61-38  investments will not cause the amount of the total investment of the

61-39  insurer to exceed any of the investment limitations specified in

61-40  subsection 1 or in chapter 682A of NRS. For the purpose of this

61-41  subsection, “total investment of the insurer” includes any direct

61-42  investment by the insurer in an asset and the insurer’s proportionate

61-43  share of any investment in an asset by any subsidiary of the insurer,

61-44  which must be calculated by multiplying the amount of the

62-1  subsidiary’s investment by the percentage of the insurer’s ownership

62-2  of the subsidiary.

62-3      [4.] 3.  Any amount in common stock, preferred stock, debt

62-4  obligations or other securities of one or more subsidiaries, with the

62-5  approval of the Commissioner, if the insurer’s surplus as regards

62-6  policyholders remains at a reasonable level in relation to the

62-7  insurer’s outstanding liabilities and adequate to its financial needs.

62-8      [5.  Any amount in the common stock, preferred stock, debt

62-9  obligations or other securities of any subsidiary exclusively engaged

62-10  in holding title to or holding title to and managing or developing

62-11  real or personal property, if after considering as a disallowed asset

62-12  so much of the investment as is represented by subsidiary assets

62-13  which if held directly by the insurer would be considered as a

62-14  disallowed asset, the insurer’s surplus as regards policyholders will

62-15  remain at a reasonable level in relation to the insurer’s outstanding

62-16  liabilities and adequate to its financial needs, and if after the

62-17  investment all voting securities of the subsidiary are owned by the

62-18  insurer.]

62-19     Sec. 69.  NRS 692C.180 is hereby amended to read as follows:

62-20     692C.180  1.  No person other than the issuer may make a

62-21  tender for or a request or invitation for tenders of, or enter into any

62-22  agreement to exchange securities for, seek to acquire or acquire in

62-23  the open market or otherwise, any voting security of a domestic

62-24  insurer if, after the consummation thereof, he would directly or

62-25  indirectly, or by conversion or by exercise of any right to acquire, be

62-26  in control of the insurer , nor may any person enter into an

62-27  agreement to merge with or otherwise acquire control of a domestic

62-28  insurer, unless, at the time any such offer, request or invitation is

62-29  made or any such agreement is entered into, or before the

62-30  acquisition of those securities if no offer or agreement is involved,

62-31  he has filed with the Commissioner and has sent to the insurer, and

62-32  the insurer has sent to its shareholders, a statement containing the

62-33  information required by NRS 692C.180 to 692C.250, inclusive, and

62-34  the offer, request, invitation, agreement or acquisition has been

62-35  approved by the Commissioner in the manner prescribed in this

62-36  chapter.

62-37     2.  For purposes of this section, a domestic insurer includes any

62-38  other person controlling a domestic insurer unless the other person

62-39  is [either] directly or through [its] his affiliates primarily engaged in

62-40  a business other than the business of insurance. [However,] If a

62-41  person is directly or through his affiliates primarily engaged in

62-42  [another] a business other than the business of insurance, he shall ,

62-43  at least 60 days before the proposed effective date of the

62-44  acquisition, file a notice of intent to acquire[, on a form prescribed

62-45  by] with the Commissioner[, at least 60 days before the proposed

63-1  effective date of the acquisition.] setting forth the information

63-2  required by section 62 of this act.

63-3      Sec. 70.  NRS 692C.210 is hereby amended to read as follows:

63-4      692C.210  1.  [The] Except as otherwise provided in

63-5  subsection 5, the Commissioner shall approve any merger or other

63-6  acquisition of control referred to in NRS 692C.180 unless, after a

63-7  public hearing thereon, he finds that:

63-8      (a) After the change of control , the domestic insurer [referred

63-9  to] specified in NRS 692C.180 would not be able to satisfy the

63-10  requirements for the issuance of a license to write the line or lines of

63-11  insurance for which it is presently licensed;

63-12     (b) The effect of the merger or other acquisition of control

63-13  would be substantially to lessen competition in insurance in this

63-14  state or tend to create a monopoly ; [therein;]

63-15     (c) The financial condition of any acquiring party [is such as

63-16  might] may jeopardize the financial stability of the insurer, or

63-17  prejudice the interest of its policyholders or the interests of any

63-18  remaining security holders who are unaffiliated with the acquiring

63-19  party;

63-20     (d) The terms of the offer, request, invitation, agreement or

63-21  acquisition referred to in NRS 692C.180 are unfair and

63-22  unreasonable to the security holders of the insurer;

63-23     (e) The plans or proposals which the acquiring party has to

63-24  liquidate the insurer, sell its assets or consolidate or merge it with

63-25  any person, or to make any other material change in its business or

63-26  corporate structure or management, are unfair and unreasonable to

63-27  policyholders of the insurer and not in the public interest; [or]

63-28     (f) The competence, experience and integrity of those persons

63-29  who would control the operation of the insurer are such that it would

63-30  not be in the interest of policyholders of the insurer and of the public

63-31  to permit the merger or other acquisition of control[.] ; or

63-32     (g) If approved, the merger or acquisition of control would

63-33  likely be harmful or prejudicial to the members of the public who

63-34  purchase insurance.

63-35     2.  The public hearing [referred to] specified in subsection 1

63-36  must be held within 30 days after the statement required by NRS

63-37  692C.180 has been filed, and at least 20 days’ notice thereof must

63-38  be given by the Commissioner to the person filing the statement.

63-39  Not less than 7 days’ notice of the public hearing must be given by

63-40  the person filing the statement to the insurer and to [such other

63-41  persons as may be] any other person designated by the

63-42  Commissioner. The insurer shall give such notice to its security

63-43  holders. The Commissioner shall make a determination within 30

63-44  days after the conclusion of the hearing. If he determines that an

63-45  infusion of capital to restore capital in connection with the change in

64-1  control is required, the requirement must be met within 60 days after

64-2  notification is given of the determination. At the hearing, the person

64-3  filing the statement, the insurer, any person to whom notice of

64-4  hearing was sent[,] and any other person whose interests may be

64-5  affected thereby may present evidence, examine and cross-examine

64-6  witnesses, and offer oral and written arguments and , in connection

64-7  therewith , may conduct discovery proceedings in the same manner

64-8  as is presently allowed in the district court of this state. All

64-9  discovery proceedings must be concluded not later than 3 days

64-10  before the commencement of the public hearing.

64-11     3.  The Commissioner may retain at the acquiring party’s

64-12  expense attorneys, actuaries, accountants and other experts not

64-13  otherwise a part of his staff as may be reasonably necessary to assist

64-14  him in reviewing the proposed acquisition of control.

64-15     4.  The period for review by the Commissioner must not exceed

64-16  the 60 days allowed between the filing of the notice of intent to

64-17  acquire required pursuant to subsection 2 of NRS 692C.180 and

64-18  the date of the proposed acquisition if the proposed affiliation or

64-19  change of control involves a financial institution, or an affiliate of a

64-20  financial institution, and an insured.

64-21     5.  When making a determination pursuant to paragraph (b)

64-22  of subsection 1, the Commissioner:

64-23     (a) Shall require the submission of the information specified

64-24  in subsection 2 of section 62 of this act;

64-25     (b) Shall not disapprove the merger or acquisition of control if

64-26  he finds that any of the circumstances specified in subsection 3 of

64-27  section 63 of this act exist; and

64-28     (c) May condition his approval of the merger or acquisition of

64-29  control in the manner provided in subsection 4 of section 64 of

64-30  this act.

64-31     6.  If, in connection with a change of control of a domestic

64-32  insurer, the Commissioner determines that the person who is

64-33  acquiring control of the domestic insurer must maintain or restore

64-34  the capital of the domestic insurer in an amount that is required

64-35  by the laws and regulations of this state, the Commissioner shall

64-36  make the determination not later than 60 days after the notice of

64-37  intent to acquire required pursuant to subsection 2 of NRS

64-38  692C.180 is filed with the Commissioner.

64-39     Sec. 71.  NRS 692C.260 is hereby amended to read as follows:

64-40     692C.260  1.  Every insurer which is authorized to do business

64-41  in this state and which is a member of an insurance holding

64-42  company system shall register with the Commissioner, except a

64-43  foreign insurer subject to disclosure requirements and standards

64-44  adopted by a statute or regulation in the jurisdiction of its domicile

65-1  which are substantially similar to those contained in NRS 692C.260

65-2  to 692C.350, inclusive.

65-3      2.  Any insurer which is subject to registration under NRS

65-4  692C.260 to 692C.350, inclusive, shall register [no] not later than

65-5  September 1, 1973, or 15 days after it becomes subject to

65-6  registration, whichever is later, unless the Commissioner for good

65-7  cause shown extends the time for registration. The Commissioner

65-8  may require any authorized insurer which is a member of a holding

65-9  company system which is not subject to registration under this

65-10  section to furnish a copy of the registration statement or other

65-11  information filed by [such] the insurance company with the

65-12  insurance regulatory authority of domiciliary jurisdiction.

65-13     3.  Any person within an insurance holding company system

65-14  subject to registration shall, upon request by an insurer, provide

65-15  complete and accurate information to the insurer if the

65-16  information is reasonably necessary to enable the insurer to

65-17  comply with the provisions of this section.

65-18     Sec. 72.  NRS 692C.270 is hereby amended to read as follows:

65-19     692C.270  Every insurer subject to registration shall file a

65-20  registration statement on a form provided by the Commissioner,

65-21  which [shall] must contain current information about:

65-22     1.  The capital structure, general financial condition, ownership

65-23  and management of the insurer and any person controlling the

65-24  insurer.

65-25     2.  The identity of every member of the insurance holding

65-26  company system.

65-27     3.  The following agreements in force, relationships subsisting

65-28  and transactions currently outstanding between [such] the insurer

65-29  and its affiliates:

65-30     (a) Loans, other investments or purchases, sales or exchanges of

65-31  securities of the affiliates by the insurer or of the insurer by its

65-32  affiliates.

65-33     (b) Purchases, sales or exchanges of assets.

65-34     (c) Transactions not in the ordinary course of business.

65-35     (d) Guarantees or undertakings for the benefit of an affiliate

65-36  which result in an actual contingent exposure of the insurer’s assets

65-37  to liability, other than insurance contracts entered into in the

65-38  ordinary course of the insurer’s business.

65-39     (e) All management and service contracts and all cost-sharing

65-40  arrangements, other than cost allocation arrangements based upon

65-41  generally accepted accounting principles.

65-42     (f) Reinsurance agreements covering all or substantially all of

65-43  one or more lines of insurance of the ceding company.

65-44     (g) Any dividend or other distribution made to a shareholder.

65-45     (h) Any consolidated agreement to allocate taxes.

66-1      4.  [Other] Any pledge of the insurer’s stock, including the

66-2  stock of any subsidiary or controlling affiliate of the insurer, for a

66-3  loan made to any member of the insurance holding company

66-4  system.

66-5      5.  Any other matters concerning transactions between

66-6  registered insurers and any affiliates as may be included from time

66-7  to time in any registration forms adopted or approved by the

66-8  Commissioner.

66-9      Sec. 73.  NRS 692C.330 is hereby amended to read as follows:

66-10     692C.330  1.  Any person may file with the Commissioner

66-11  [a] :

66-12     (a) A disclaimer of affiliation with any authorized insurer

66-13  specified in the disclaimer; or [such a]

66-14     (b) A request for a termination of registration on the basis that

66-15  the person does not, or will not after taking an action specified in

66-16  the request for termination, control another person specified in the

66-17  request.

66-18     2.  A disclaimer of affiliation or request for a termination of

66-19  registration specified in subsection 1 may be filed by [such] the

66-20  authorized insurer or any member of an insurance holding company

66-21  system. [The disclaimer shall fully disclose] A disclaimer of

66-22  affiliation or request for a termination of registration filed

66-23  pursuant to subsection 1 must include:

66-24     (a) A statement indicating the number of authorized, issued

66-25  and outstanding voting securities of the person specified in the

66-26  disclaimer of affiliation or request for a termination of

66-27  registration;

66-28     (b) A statement indicating the number and percentage of

66-29  shares of the person specified in the disclaimer of affiliation or

66-30  request for a termination of registration that are owned or

66-31  beneficially owned by the person disclaiming control, and the

66-32  number of those shares for which the person disclaiming control

66-33  has a direct or indirect right to acquire;

66-34     (c) A statement setting forth all material relationships and bases

66-35  for affiliation between [such person and such insurer as well as the

66-36  basis for disclaiming such affiliation.

66-37     2.] the person specified in the disclaimer of affiliation or

66-38  request for a termination of registration and the person and any

66-39  affiliate of the person who is disclaiming control of the person

66-40  specified in the disclaimer of affiliation or request for a

66-41  termination of registration; and

66-42     (d) An explanation of why the person who is disclaiming

66-43  control does not control the person specified in the disclaimer of

66-44  affiliation or request for a termination of registration.

67-1      3.  A request for a termination of registration filed pursuant to

67-2  subsection 1 shall be deemed granted upon filing unless the

67-3  Commissioner, within 30 days after receipt of the request for a

67-4  termination of registration, notifies the person, authorized insurer

67-5  or member of an insurance holding company system that the

67-6  request is denied.

67-7      4. After a disclaimer of affiliation has been filed, the insurer

67-8  [shall be] is relieved of any duty to register or report under NRS

67-9  692C.260 to 692C.350, inclusive, which may arise out of the

67-10  insurer’s relationship with [such] the person unless the

67-11  Commissioner disallows [such a] the disclaimer. The Commissioner

67-12  [shall disallow such a] may disallow the disclaimer only after

67-13  furnishing all parties in interest with a notice and opportunity to be

67-14  heard and after making specific findings of fact to support [such] the

67-15  disallowance.

67-16     Sec. 74.  NRS 692C.350 is hereby amended to read as follows:

67-17     692C.350  1.  The failure to file a registration statement or any

67-18  amendment thereto required by NRS 692C.260 to 692C.350,

67-19  inclusive, within the time specified for [such filing, shall be] the

67-20  filing is a violation of NRS 692C.260 to 692C.350, inclusive.

67-21     2.  Except as otherwise provided in subsection 3, if an insurer

67-22  fails, without just cause, to file a registration statement required

67-23  pursuant to NRS 692C.270, the insurer shall, after receiving

67-24  notice and a hearing, pay a civil penalty of $100 for each day the

67-25  insurer fails to file the registration statement. The civil penalty

67-26  may be recovered in a civil action brought by the Commissioner.

67-27  Any civil penalty paid pursuant to this subsection must be

67-28  deposited in the State General Fund.

67-29     3.  The maximum civil penalty that may be imposed pursuant

67-30  to subsection 2 is $20,000. The Commissioner may reduce the

67-31  amount of the civil penalty if the insurer demonstrates to the

67-32  satisfaction of the Commissioner that the payment of the civil

67-33  penalty would impose a financial hardship on the insurer.

67-34     4.  Any officer, director or employee of an insurance holding

67-35  company system who willfully and knowingly subscribes to or

67-36  makes or causes to be made any false statement, false report or

67-37  false filing with the intent to deceive the Commissioner in the

67-38  performance of his duties pursuant to NRS 692C.260 to 692C.350,

67-39  inclusive, is guilty of a category D felony and shall be punished as

67-40  provided in NRS 193.130. The officer, director or employee is

67-41  personally liable for any fine imposed against him pursuant to that

67-42  section.

67-43     Sec. 75.  NRS 692C.363 is hereby amended to read as follows:

67-44     692C.363  1.  A domestic insurer shall not enter into any of

67-45  the following transactions with an affiliate unless the insurer has

68-1  notified the Commissioner in writing of its intention to enter into the

68-2  transaction at least 60 days previously, or such shorter period as the

68-3  Commissioner may permit, and the Commissioner has not

68-4  disapproved it within that period:

68-5      (a) A sale, purchase, exchange, loan or extension of credit,

68-6  guaranty or investment if the transaction equals at least:

68-7          (1) With respect to an insurer other than a life insurer, the

68-8  lesser of 3 percent of the insurer’s admitted assets or 25 percent of

68-9  surplus as regards policyholders; or

68-10         (2) With respect to a life insurer, 3 percent of the insurer’s

68-11  admitted assets,

68-12  computed as of December 31 next preceding the transaction.

68-13     (b) A loan or extension of credit to any person who is not an

68-14  affiliate, if the insurer makes the loan or extension of credit with the

68-15  agreement or understanding that the proceeds of the transaction, in

68-16  whole or in substantial part, are to be used to make loans or

68-17  extensions of credit to, to purchase assets of, or to make investments

68-18  in, any affiliate of the insurer if the transaction equals at least:

68-19         (1) With respect to insurers other than life insurers, the lesser

68-20  of 3 percent of the insurer’s admitted assets or 25 percent of surplus

68-21  as regards policyholders; or

68-22         (2) With respect to life insurers, 3 percent of the insurer’s

68-23  admitted assets,

68-24  computed as of December 31 next preceding the transaction.

68-25     (c) An agreement for reinsurance or a modification thereto in

68-26  which the premium for reinsurance or a change in the insurer’s

68-27  liabilities equals at least 5 percent of the insurer’s surplus as regards

68-28  policyholders as of December 31 next preceding the transaction,

68-29  including an agreement which requires as consideration the transfer

68-30  of assets from an insurer to a nonaffiliate, if an agreement or

68-31  understanding exists between the insurer and nonaffiliate that any

68-32  portion of those assets will be transferred to an affiliate of the

68-33  insurer.

68-34     (d) An agreement for management, contract for service,

68-35  guarantee or arrangement to share costs.

68-36     (e) A guaranty made by a domestic insurer, except that a

68-37  guaranty that is quantifiable as to amount is not subject to

68-38  the provisions of this subsection unless the guaranty exceeds the

68-39  lesser of one-half of 1 percent of the admitted assets of the

68-40  domestic insurer or 10 percent of its surplus as regards

68-41  policyholders as of December 31 next preceding the guaranty.

68-42     (f) Except as otherwise provided in subsection 3, a direct or

68-43  indirect acquisition of or investment in a person who controls the

68-44  domestic insurer or an affiliate of the domestic insurer in an

69-1  amount that, when added to its present holdings, exceeds 2.5

69-2  percent of the domestic insurer’s surplus to policyholders.

69-3      (g) A material transaction, specified by regulation, which the

69-4  Commissioner determines may adversely affect the interest of the

69-5  insurer’s policyholders.

69-6      2.  This section does not authorize or permit any transaction

69-7  which, in the case of an insurer not an affiliate, would be contrary to

69-8  law.

69-9      3.  The provisions of paragraph (f) of subsection 1 do not

69-10  apply to a direct or indirect acquisition of or investment in:

69-11     (a) A subsidiary acquired in accordance with this section or

69-12  NRS 692C.140; or

69-13     (b) A nonsubsidiary insurance affiliate that is subject to the

69-14  provisions of this chapter.

69-15     Sec. 76.  (Deleted by amendment.)

69-16     Sec. 77.  NRS 692C.390 is hereby amended to read as follows:

69-17     692C.390  [No]

69-18     1.  An insurer subject to registration under NRS 692C.260 to

69-19  692C.350, inclusive, shall not pay any extraordinary dividend or

69-20  make any other extraordinary distribution to its shareholders until:

69-21     [1.] (a) Thirty days after the Commissioner has received notice

69-22  of the declaration thereof and has not within [such] that period

69-23  disapproved [such] the payment; or

69-24     [2.] (b) The Commissioner [shall have approved such] approves

69-25  the payment within [such] the 30-day period.

69-26     2.  A request for approval of an extraordinary dividend or any

69-27  other extraordinary distribution pursuant to subsection 1 must

69-28  include:

69-29     (a) A statement indicating the amount of the proposed

69-30  dividend or distribution;

69-31     (b) The date established for the payment of the proposed

69-32  dividend or distribution;

69-33     (c) A statement indicating whether the proposed dividend or

69-34  distribution is to be paid in the form of cash or property and, if it is

69-35  to be paid in the form of property, a description of the property, its

69-36  cost and its fair market value together with an explanation setting

69-37  forth the basis for determining its fair market value;

69-38     (d) A copy of a work paper or other document setting forth the

69-39  calculations used to determine that the proposed dividend or

69-40  distribution is extraordinary, including:

69-41         (1) The amount, date and form of payment of each regular

69-42  dividend or distribution paid by the insurer, other than any

69-43  distribution of a security of the insurer, within the 12 consecutive

69-44  months immediately preceding the date established for the

69-45  payment of the proposed dividend or distribution;

70-1          (2) The amount of surplus, if any, as regards policyholders,

70-2  including total capital and surplus, as of December 31 next

70-3  preceding;

70-4          (3) If the insurer is a life insurer, the amount of any net

70-5  gains obtained from the operations of the insurer for the 12-month

70-6  period ending December 31 next preceding;

70-7          (4) If the insurer is not a life insurer, the amount of net

70-8  income of the insurer less any realized capital gains for the 12-

70-9  month period ending on the December 31 of the year next

70-10  preceding and the two consecutive 12-month periods immediately

70-11  preceding that period; and

70-12         (5) If the insurer is not a life insurer, the amount of each

70-13  dividend paid by the insurer to shareholders, other than a

70-14  distribution of any securities of the insurer, during the preceding 2

70-15  calendar years;

70-16     (e) A balance sheet and statement of income for the period

70-17  beginning on the date of the last annual statement filed by the

70-18  insurer with the Commissioner and ending on the last day of the

70-19  month immediately preceding the month in which the insurer files

70-20  the request for approval; and

70-21     (f) A brief statement setting forth:

70-22         (1) The effect of the proposed dividend or distribution upon

70-23  the insurer’s surplus;

70-24         (2) The reasonableness of the insurer’s surplus in relation

70-25  to the insurer’s outstanding liabilities; and

70-26         (3) The adequacy of the insurer’s surplus in relation to the

70-27  insurer’s financial requirements.

70-28     3.  Each insurer specified in subsection 1 that pays an

70-29  extraordinary dividend or makes any other extraordinary

70-30  distribution to its shareholders shall, within 15 days after

70-31  declaring the dividend or making the distribution, report that fact

70-32  to the Commissioner. The report must include the information

70-33  specified in paragraph (d) of subsection 2.

70-34     Sec. 78.  NRS 692C.420 is hereby amended to read as follows:

70-35     692C.420  1.  All information, documents and copies thereof

70-36  obtained by or disclosed to the Commissioner or any other person in

70-37  the course of an examination or investigation made pursuant to NRS

70-38  692C.410, and all information reported pursuant to NRS 692C.260

70-39  to 692C.350, inclusive, [shall] must be given confidential treatment

70-40  and [shall not be] is not subject to subpoena and [shall] must not be

70-41  made public by the Commissioner or any other person, except to

70-42  insurance departments of other states, without the prior written

70-43  consent of the insurer to which it pertains unless the Commissioner,

70-44  after giving the insurer and its affiliates who would be affected

70-45  thereby[,] notice and an opportunity to be heard, determines that

71-1  the interests of policyholders, shareholders or the public will be

71-2  served by the publication thereof, in which event he may publish all

71-3  or any part thereof in [such] any manner as he may deem

71-4  appropriate.

71-5      2.  The Commissioner or any person who receives any

71-6  documents, materials or other information while acting under the

71-7  authority of the Commissioner must not be permitted or required

71-8  to testify in a private civil action concerning any information,

71-9  document or copy thereof specified in subsection 1.

71-10     3.  The Commissioner may share or receive any information,

71-11  document or copy thereof specified in subsection 1 in accordance

71-12  with section 1 of this act. The sharing or receipt of the

71-13  information, document or copy pursuant to this subsection does

71-14  not waive any applicable privilege or claim of confidentiality in the

71-15  information, document or copy.

71-16     Sec. 78.3. NRS 693A.495 is hereby amended to read as

71-17  follows:

71-18     693A.495  1.  No director, officer, employee or agent of the

71-19  converting mutual, or any other person, may receive any fee,

71-20  commission or other valuable consideration, other than his usual

71-21  regular salary and compensation, for aiding, promoting or assisting

71-22  in a plan of conversion except as set forth in the plan of conversion

71-23  approved by the Commissioner.

71-24     2.  Subsection 1 does not prohibit a management or employee

71-25  incentive compensation program that is contained in the plan of

71-26  conversion and approved by the Commissioner to be adopted upon

71-27  conversion to the new stock insurer or prohibit such a program to be

71-28  adopted later by the new stock insurer.

71-29     3.  Subsection 1 does not prohibit the payment of reasonable

71-30  fees and compensation to attorneys, accountants, actuaries and

71-31  investment bankers for services performed in the independent

71-32  practice of their professions if the person is also a member of the

71-33  board of directors of the converting mutual.

71-34     Sec. 78.5. NRS 693A.625 is hereby amended to read as

71-35  follows:

71-36     693A.625  1.  All the initial shares of the capital stock of a

71-37  reorganized stock insurer must be issued to the mutual insurance

71-38  holding company or to [a single] one or more intermediate stock

71-39  holding [company.] companies.

71-40     2.  Policyholders of a domestic mutual insurer that has been

71-41  reorganized are members of the mutual insurance holding company,

71-42  and their voting rights must be determined in accordance with the

71-43  articles of incorporation and bylaws of the mutual insurance holding

71-44  company. The mutual insurance holding company shall provide its

71-45  members with the same membership rights as were provided to

72-1  policyholders of the mutual insurer immediately before

72-2  reorganization. The reorganization must not reduce, limit or

72-3  otherwise affect the number or identity of the policyholders who

72-4  may become members of the mutual insurance holding company or

72-5  secure for managerial personnel any unfair advantage through or

72-6  connected with the reorganization.

72-7      3.  A mutual insurance holding company or an intermediate

72-8  stock holding company formed pursuant to NRS 693A.550 to

72-9  693A.665, inclusive:

72-10     (a) Must not be authorized to transact the business of insurance;

72-11     (b) Is subject to the jurisdiction of the Commissioner, who shall

72-12  ensure that policyholder interests are protected; and

72-13     (c) Shall be deemed to be an insurer for the purposes of chapter

72-14  696B of NRS.

72-15     4.  An intermediate stock holding company formed pursuant to

72-16  NRS 693A.550 to 693A.665, inclusive, shall be deemed to be a

72-17  mutual insurance holding company subject to the provisions of NRS

72-18  693A.400 to 693A.540, inclusive.

72-19     5.  A mutual insurance holding company formed pursuant to

72-20  NRS 693A.550 to 693A.665, inclusive:

72-21     (a) Shall not issue stock.

72-22     (b) Shall invest in insurers not less than 50 percent of its net

72-23  worth as determined by generally accepted accounting practices.

72-24     6.  The aggregate pledges and encumbrances of the assets of a

72-25  mutual insurance holding company must not affect more than 49

72-26  percent of the mutual insurance holding company’s stock in an

72-27  intermediate stock holding company or a reorganized stock insurer.

72-28     7.  If any proceeding under chapter 696B of NRS is brought

72-29  against a reorganized stock insurer, the mutual insurance holding

72-30  company and each intermediate stock holding company must be

72-31  named parties to the proceeding. All the assets of the mutual

72-32  insurance holding company and [the] each intermediate stock

72-33  holding company shall be deemed assets of the estate of the

72-34  reorganized stock insurer to the extent necessary to satisfy claims

72-35  against the reorganized stock insurer.

72-36     8.  No distribution to members of a mutual insurance holding

72-37  company may occur without the prior written approval of the

72-38  Commissioner. The Commissioner may give such approval only if

72-39  he is satisfied that the distribution is fair and equitable to

72-40  policyholders as members of the mutual insurance holding

72-41  company.

72-42     9.  No solicitation for the sale of the stock of an intermediate

72-43  stock holding company or a reorganized stock insurer may be made

72-44  without the prior written approval of the Commissioner.

73-1      10.  A mutual insurance holding company or an intermediate

73-2  stock holding company may not voluntarily dissolve without the

73-3  approval of the Commissioner.

73-4      Sec. 78.7. NRS 693A.640 is hereby amended to read as

73-5  follows:

73-6      693A.640 1.  No director, officer, employee or agent of the

73-7  mutual insurer, or any other person, may receive any fee,

73-8  commission or other valuable consideration, other than his usual

73-9  regular salary and compensation, for aiding, promoting or assisting

73-10  in a plan of reorganization except as set forth in the plan of

73-11  reorganization approved by the Commissioner.

73-12     2.  Subsection 1 does not prohibit a management or employee

73-13  incentive compensation program that is contained in the plan of

73-14  reorganization and approved by the Commissioner to be adopted

73-15  upon reorganization to the reorganized stock insurer or prohibit such

73-16  a program to be adopted later by the reorganized stock insurer.

73-17     3.  Subsection 1 does not prohibit the payment of reasonable

73-18  fees and compensation to attorneys, accountants, actuaries and

73-19  investment bankers for services performed in the independent

73-20  practice of their professions if the person is also a member of the

73-21  board of directors of the mutual insurer.

73-22     Sec. 79.  NRS 694C.050 is hereby amended to read as follows:

73-23     694C.050  “Association captive insurer” means a captive

73-24  insurer that only insures risks of the member organizations of an

73-25  association and the affiliated companies of those members,

73-26  including groups formed pursuant to the Product Liability Risk

73-27  Retention Act of 1981, as amended, 15 U.S.C. §§ 3901 et seq. , if:

73-28     1.  The association or the member organizations of the

73-29  association:

73-30     (a) Own, control or hold with the power to vote all the

73-31  outstanding voting securities of the association captive insurer, if

73-32  the association captive insurer is incorporated as a stock insurer;

73-33  or

73-34     (b) Have complete voting control over the captive insurer, if

73-35  the captive insurer is formed as a mutual insurer; and

73-36     2.  The member organizations of the association collectively

73-37  constitute all the subscribers of the captive insurer, if the captive

73-38  insurer is formed as a reciprocal insurer.

73-39     Sec. 80.  NRS 694C.450 is hereby amended to read as follows:

73-40     694C.450  1.  Except as otherwise provided in this section, a

73-41  captive insurer shall pay to the Division, not later than March 1 of

73-42  each year, a tax at the rate of:

73-43     (a) Two-fifths of 1 percent on the first $20,000,000 of its net

73-44  direct premiums;

74-1      (b) One-fifth of 1 percent on the next $20,000,000 of its net

74-2  direct premiums; and

74-3      (c) Seventy-five thousandths of 1 percent on each additional

74-4  dollar of its net direct premiums.

74-5      2.  Except as otherwise provided in this section, a captive

74-6  insurer shall pay to the Division, not later than March 1 of each

74-7  year, a tax at a rate of:

74-8      (a) Two hundred twenty-five thousandths of 1 percent on the

74-9  first $20,000,000 of revenue from assumed reinsurance premiums;

74-10     (b) One hundred fifty thousandths of 1 percent on the next

74-11  $20,000,000 of revenue from assumed reinsurance premiums; and

74-12     (c) Twenty-five thousandths of 1 percent on each additional

74-13  dollar of revenue from assumed reinsurance premiums.

74-14  The tax on reinsurance premiums pursuant to this subsection must

74-15  not be levied on premiums for risks or portions of risks which are

74-16  subject to taxation on a direct basis pursuant to subsection 1. A

74-17  captive insurer is not required to pay any reinsurance premium tax

74-18  pursuant to this subsection on revenue related to the receipt of assets

74-19  by the captive insurer in exchange for the assumption of loss

74-20  reserves and other liabilities of another insurer that is under

74-21  common ownership and control with the captive insurer, if the

74-22  transaction is part of a plan to discontinue the operation of the other

74-23  insurer and the intent of the parties to the transaction is to renew or

74-24  maintain such business with the captive insurer.

74-25     3.  If the sum of the taxes to be paid by a captive insurer

74-26  calculated pursuant to subsections 1 and 2 is less than $5,000 in any

74-27  given year, the captive insurer shall pay a tax of $5,000 for that

74-28  year.

74-29     4.  Two or more captive insurers under common ownership and

74-30  control must be taxed as if they were a single captive insurer.

74-31     5.  Notwithstanding any specific statute to the contrary and

74-32  except as otherwise provided in this subsection, the tax provided for

74-33  by this section constitutes all the taxes collectible pursuant to the

74-34  laws of this state from a captive insurer, and no occupation tax or

74-35  other taxes may be levied or collected from a captive insurer by this

74-36  state or by any county, city or municipality within this state, except

74-37  for ad valorem taxes on real or personal property located in this state

74-38  used in the production of income by the captive insurer.

74-39     6.  Ten percent of the revenues collected from the tax imposed

74-40  pursuant to this section must be deposited with the State Treasurer

74-41  for credit to the Account for the Regulation and Supervision of

74-42  Captive Insurers created pursuant to NRS 694C.460. The remaining

74-43  90 percent of the revenues collected must be deposited with the

74-44  State Treasurer for credit to the State General Fund.

75-1      7.  A captive insurer that is issued a license pursuant to this

75-2  chapter after July 1, 2003, is entitled to receive a nonrefundable

75-3  credit of $5,000 applied against the aggregate taxes owed by the

75-4  captive insurer for the first year in which the captive insurer

75-5  incurs any liability for the payment of taxes pursuant to this

75-6  section. A captive insurer is entitled to a nonrefundable credit

75-7  pursuant to this section not more than once after the captive

75-8  insurer is initially licensed pursuant to this chapter.

75-9      8.  As used in this section, unless the context otherwise

75-10  requires:

75-11     (a) “Common ownership and control” means:

75-12         (1) In the case of a stock insurer, the direct or indirect

75-13  ownership of 80 percent or more of the outstanding voting stock of

75-14  two or more corporations by the same member or members.

75-15         (2) In the case of a mutual insurer, the direct or indirect

75-16  ownership of 80 percent or more of the surplus and the voting power

75-17  of two or more corporations by the same member or members.

75-18     (b) “Net direct premiums” means the direct premiums collected

75-19  or contracted for on policies or contracts of insurance written by a

75-20  captive insurer during the preceding calendar year, less the amounts

75-21  paid to policyholders as return premiums, including dividends on

75-22  unabsorbed premiums or premium deposits returned or credited to

75-23  policyholders.

75-24     Sec. 80.5. NRS 695C.055 is hereby amended to read as

75-25  follows:

75-26     695C.055  1.  The provisions of NRS 449.465, 679B.700,

75-27  subsections 2, 4, 18, 19 and 32 of NRS 680B.010, NRS [680B.025]

75-28  680B.020 to 680B.060, inclusive, and chapter 695G of NRS apply

75-29  to a health maintenance organization.

75-30     2.  For the purposes of subsection 1, unless the context requires

75-31  that a provision apply only to insurers, any reference in those

75-32  sections to “insurer” must be replaced by “health maintenance

75-33  organization.”

75-34     Sec. 81.  NRS 696B.415 is hereby amended to read as follows:

75-35     696B.415  1.  Upon the issuance of an order of liquidation

75-36  with a finding of insolvency against a domestic insurer, the

75-37  Commissioner shall apply to the district court for authority to

75-38  disburse money to the Nevada Insurance Guaranty Association or

75-39  the Nevada Life and Health Insurance Guaranty Association out of

75-40  the marshaled assets of the insurer, as money becomes available, in

75-41  amounts equal to disbursements made or to be made by the

75-42  Association for claims-handling expense and covered-claims

75-43  obligations upon the presentation of evidence that disbursements

75-44  have been made by the Association. The Commissioner shall apply

75-45  to the district court for authority to make similar disbursements to

76-1  insurance guaranty associations in other jurisdictions if one of the

76-2  Nevada Associations is entitled to like payment pursuant to the laws

76-3  relating to insolvent insurers in the jurisdiction in which the

76-4  organization is domiciled.

76-5      2.  The Commissioner, in determining the amounts available for

76-6  disbursement to the Nevada Insurance Guaranty Association, the

76-7  Nevada Life and Health Insurance Guaranty Association[,] and

76-8  similar organizations in other jurisdictions, shall reserve sufficient

76-9  assets for the payment of the expenses of administration.

76-10     3.  The Commissioner shall establish procedures for the ratable

76-11  allocation of disbursements to the Nevada Insurance Guaranty

76-12  Association, the Nevada Life and Health Insurance Guaranty

76-13  Association[,] and similar organizations in other jurisdictions, and

76-14  shall secure from each organization to which money is paid as a

76-15  condition to advances in reimbursement of covered-claims

76-16  obligations an agreement to return to the Commissioner, on demand,

76-17  amounts previously advanced which are required to pay claims of

76-18  secured creditors and claims falling within the priorities established

76-19  in paragraph (a) or (b) of subsection 1 of NRS 696B.420.

76-20     4.  The Commissioner, as receiver for an insolvent insurer,

76-21  may file a claim on behalf of all insureds for any unearned

76-22  premiums. The Nevada Insurance Guaranty Association, the

76-23  Nevada Life and Health Insurance Guaranty Association and

76-24  similar organizations in other jurisdictions shall accept the claim

76-25  in lieu of requiring each insured to file a claim for the unearned

76-26  premium.

76-27     Sec. 82.  NRS 696B.420 is hereby amended to read as follows:

76-28     696B.420  1.  The order of distribution of claims from the

76-29  estate of the insurer on liquidation of the insurer must be as set forth

76-30  in this section. Each claim in each class must be paid in full or

76-31  adequate money retained for the payment before the members of the

76-32  next class receive any payment. No subclasses may be established

76-33  within any class. Except as otherwise provided in subsection 2, the

76-34  order of distribution and of priority must be as follows:

76-35     (a) Administration costs and expenses, including, but not limited

76-36  to, the following:

76-37         (1) The actual and necessary costs of preserving or

76-38  recovering the assets of the insurer;

76-39         (2) Compensation for any services rendered in the

76-40  liquidation;

76-41         (3) Any necessary filing fees;

76-42         (4) The fees and mileage payable to witnesses; and

76-43         (5) Reasonable attorney’s fees.

76-44     (b) [Loss claims, including any] All claims under policies , [for

76-45  losses incurred, including third-party claims,] any claims against

77-1  [the insurer]an insured for liability for bodily injury or for injury to

77-2  or destruction of tangible property which are [not]covered claims

77-3  under policies, including any such claims of the Federal

77-4  Government or any state or local government, and any claims of

77-5  the Nevada Insurance Guaranty Association, the Nevada Life and

77-6  Health Insurance Guaranty Association[,] and other similar

77-7  statutory organizations in other jurisdictions. Any claims under life

77-8  insurance and annuity policies, whether for death proceeds, annuity

77-9  proceeds or investment values, must be treated as loss claims. That

77-10  portion of any loss for which indemnification is provided by other

77-11  benefits or advantages recovered or recoverable by the claimant may

77-12  not be included in this class, other than benefits or advantages

77-13  recovered or recoverable in discharge of familial obligations of

77-14  support or because of succession at death or as proceeds of life

77-15  insurance, or as gratuities. No payment made by an employer to his

77-16  employee may be treated as a gratuity.

77-17     (c) Unearned premiums and small loss claims, including claims

77-18  under nonassessable policies for unearned premiums or other

77-19  premium refunds.

77-20     (d) [Claims]Except as otherwise provided in paragraph (b),

77-21  claims of the Federal Government.

77-22     (e) [Claims]Except as otherwise provided in paragraph (b),

77-23  claims of any state or local government, including, but not limited

77-24  to, a claim of a state or local government for a penalty or forfeiture.

77-25     (f) Wage debts due employees for services performed, not to

77-26  exceed [$1,000 to]an amount equal to 2 months of monetary

77-27  compensation for each employee[, that have been earned]for

77-28  services performed within 6 months before the filing of the petition

77-29  for liquidation or, if rehabilitation preceded liquidation, within 1

77-30  year before the filing of the petition for [liquidation.]rehabilitation.

77-31  Officers of the insurer are not entitled to the benefit of this priority.

77-32  The priority set forth in this paragraph must be in lieu of any other

77-33  similar priority authorized by law as to wages or compensation of

77-34  employees.

77-35     (g) Residual classification, including any other claims not

77-36  falling within other classes pursuant to the provisions of this section.

77-37  Claims for a penalty or forfeiture must be allowed in this class only

77-38  to the extent of the pecuniary loss sustained from the act, transaction

77-39  or proceeding out of which the penalty or forfeiture arose, with

77-40  reasonable and actual costs occasioned thereby. The remainder of

77-41  the claims must be postponed to the class of claims specified in

77-42  paragraph (j).

77-43     (h) Judgment claims based solely on judgments. If a claimant

77-44  files a claim and bases the claim on the judgment and on the

77-45  underlying facts, the claim must be considered by the liquidator,

78-1  who shall give the judgment such weight as he deems appropriate.

78-2  The claim as allowed must receive the priority it would receive in

78-3  the absence of the judgment. If the judgment is larger than the

78-4  allowance on the underlying claim, the remaining portion of the

78-5  judgment must be treated as if it were a claim based solely on a

78-6  judgment.

78-7      (i) Interest on claims already paid, which must be calculated at

78-8  the legal rate compounded annually on any claims in the classes

78-9  specified in paragraphs (a) to (h), inclusive, from the date of the

78-10  petition for liquidation or the date on which the claim becomes due,

78-11  whichever is later, until the date on which the dividend is declared.

78-12  The liquidator, with the approval of the court, may:

78-13         (1) Make reasonable classifications of claims for purposes of

78-14  computing interest;

78-15         (2) Make approximate computations; and

78-16         (3) Ignore certain classifications and periods as de minimis.

78-17     (j) Miscellaneous subordinated claims, with interest as provided

78-18  in paragraph (i):

78-19         (1) Claims subordinated by NRS 696B.430;

78-20         (2) Claims filed late;

78-21         (3) Portions of claims subordinated pursuant to the

78-22  provisions of paragraph (g);

78-23         (4) Claims or portions of claims the payment of which is

78-24  provided by other benefits or advantages recovered or recoverable

78-25  by the claimant; and

78-26         (5) Claims not otherwise provided for in this section.

78-27     (k) Preferred ownership claims, including surplus or

78-28  contribution notes, or similar obligations, and premium refunds on

78-29  assessable policies. Interest at the legal rate must be added to each

78-30  claim, as provided in paragraphs (i) and (j).

78-31     (l) Proprietary claims of shareholders or other owners.

78-32     2.  If there are no existing or potential claims of the government

78-33  against the estate, claims for wages have priority over any claims set

78-34  forth in paragraphs (c) to (k), inclusive, of subsection 1. The

78-35  provisions of this subsection must not be construed to require the

78-36  accumulation of interest for claims as described in paragraph (i) of

78-37  subsection 1.

78-38     Sec. 82.5. NRS 697.270 is hereby amended to read as follows:

78-39     697.270  A bail agent shall not [become a surety] act as an

78-40  attorney-in-fact for an insurer on an undertaking unless he has

78-41  registered in the office of the sheriff and with the clerk of the district

78-42  court in which the agent resides, and he may register in the same

78-43  manner in any other county. Any bail agent shall file a certified

78-44  copy of his appointment by power of attorney from each insurer

78-45  which he represents as agent with each of such officers. The bail

79-1  agent shall register and file a certified copy of renewed power of

79-2  attorney annually on July 1. The clerk of the district court and the

79-3  sheriff shall not permit the registration of a bail agent unless the

79-4  agent is licensed by the Commissioner.

79-5      Sec. 83.  NRS 697.290 is hereby amended to read as follows:

79-6      697.290  Every bail agent must maintain in his office such

79-7  records of bail bonds, and such additional information as the

79-8  Commissioner may reasonably require, executed or countersigned

79-9  by him to enable the public to obtain all necessary information

79-10  concerning the bail bonds for at least [1 year] 3 years after the

79-11  liability of the surety has been terminated. The records must be open

79-12  to examination by the Commissioner or his representatives at all

79-13  times, and the Commissioner at any time may require the licensee to

79-14  furnish to him, in such manner or form as he requires, any

79-15  information kept or required to be kept in the records.

79-16     Sec. 83.5. NRS 697.300 is hereby amended to read as follows:

79-17     697.300  1.  A bail agent shall not, in any bail transaction or in

79-18  connection therewith, directly or indirectly, charge or collect money

79-19  or other valuable consideration from any person except for the

79-20  following purposes:

79-21     (a) To pay the premium at the rates established by the insurer, in

79-22  accordance with chapter 686B of NRS, or to pay the charges for the

79-23  bail bond filed in connection with the transaction at the rates filed in

79-24  accordance with the provisions of this Code. The rates must be [not

79-25  less than 10 percent or more than] 15 percent of the amount of the

79-26  bond or $50, whichever is greater.

79-27     (b) To provide collateral.

79-28     (c) To reimburse himself for actual expenses incurred in

79-29  connection with the transaction. Such expenses are limited to:

79-30         (1) Guard fees.

79-31         (2) Notary public fees, recording fees, expenses incurred for

79-32  necessary long distance telephone calls and charges for telegrams.

79-33         (3) Travel expenses incurred more than 25 miles from the

79-34  agent’s principal place of business. Such expenses:

79-35             (I) May be billed at the rate provided for state officers and

79-36  employees generally; and

79-37             (II) May not be charged in areas where bail agents

79-38  advertise a local telephone number.

79-39         (4) Expenses incurred to verify underwriting information.

79-40         (5) Any other actual expenditure necessary to the transaction

79-41  which is not usually and customarily incurred in connection with

79-42  bail transactions.

79-43     (d) To reimburse himself, or have a right of action against the

79-44  principal or any indemnitor, for actual expenses incurred in good

79-45  faith, by reason of breach by the defendant of any of the terms of the

80-1  written agreement under which and pursuant to which the

80-2  undertaking of bail or bail bond was written. If there is no written

80-3  agreement, or an incomplete writing, the surety may, at law, enforce

80-4  its equitable rights against the principal and his indemnitors, in

80-5  exoneration. Such reimbursement or right of action must not exceed

80-6  the principal sum of the bond or undertaking, plus any reasonable

80-7  expenses that may be verified by receipt in a total amount of not

80-8  more than the principal sum of the bond or undertaking, incurred in

80-9  good faith by the surety, its agents, licensees and employees by

80-10  reason of the principal’s breach.

80-11     2.  This section does not prevent the full and unlimited right of

80-12  a bail agent to execute undertaking of bail on behalf of a nonresident

80-13  agent of the surety he represents. The licensed resident bail agent is

80-14  entitled to a minimum countersignature fee of $5, with a maximum

80-15  countersignature fee of $100, plus expenses incurred in accordance

80-16  with paragraphs (c) and (d) of subsection 1. Such countersignature

80-17  fees may be charged in addition to the premium of the undertaking.

80-18     Sec. 84.  NRS 697.320 is hereby amended to read as follows:

80-19     697.320  1.  A bail agent may accept collateral security in

80-20  connection with a bail transaction if the collateral security is

80-21  reasonable in relation to the face amount of the bond. The bail agent

80-22  shall not transfer the collateral to any person other than a bail

80-23  agent licensed pursuant to this chapter or a surety insurer holding

80-24  a valid certificate of authority issued by the Commissioner. The

80-25  collateral must not be transported or otherwise removed from this

80-26  state. Any person who receives the collateral:

80-27     (a) Shall be deemed to hold the collateral in a fiduciary

80-28  capacity to the same extent as a bail agent; and

80-29     (b) Shall retain, return and otherwise possess the collateral in

80-30  accordance with the provisions of this chapter.

80-31     2.  The collateral security must be received by the bail agent in

80-32  his fiduciary capacity, and before any forfeiture of bail must be kept

80-33  separate and apart from any other funds or assets of the licensee.

80-34  Any collateral received must be returned to the person who

80-35  deposited it with the bail agent or any assignee other than the bail

80-36  agent as soon as the obligation, the satisfaction of which was

80-37  secured by the collateral, is discharged and all fees owed to the bail

80-38  agent have been paid. The bail agent or any surety insurer having

80-39  custody of the collateral shall, immediately after the bail agent or

80-40  surety insurer receives a request for return of the collateral from

80-41  the person who deposited the collateral, determine whether the

80-42  bail agent or surety insurer has received notice that the obligation

80-43  is discharged. If the collateral is deposited to secure the obligation

80-44  of a bond, it must be returned [within 30 days] immediately after

80-45  receipt of the request for return of the collateral and notice of the

81-1  entry of any order by an authorized official by virtue of which

81-2  liability under the bond is terminated or upon payment of all fees

81-3  owed to the bail agent, whichever is later. A certified copy of the

81-4  minute order from the court wherein the bail or undertaking was

81-5  ordered exonerated shall be deemed prima facie evidence of

81-6  exoneration or termination of liability.

81-7      3.  If a bail agent receives as collateral in a bail transaction,

81-8  whether on his or another person’s behalf, any document

81-9  conveying title to real property, the bail agent shall not accept the

81-10  document unless it indicates on its face that it is executed as part

81-11  of a security transaction. If the document is recorded, the bail

81-12  agent or any surety insurer having possession of the document

81-13  shall, immediately after the bail agent or surety insurer receives a

81-14  request for return of the collateral from the person who executed

81-15  the document:

81-16     (a) Determine whether the bail agent or surety insurer has

81-17  received notice that the obligation for which the document was

81-18  accepted is discharged; and

81-19     (b) If the obligation has been discharged, reconvey the real

81-20  property by delivering a deed or other document of conveyance to

81-21  the person or to his heirs, legal representative or successor in

81-22  interest. The deed or other document of conveyance must be

81-23  prepared in such a manner that it may be recorded.

81-24     4.  If the amount of any collateral received in a bail

81-25  transaction exceeds the amount of any bail forfeited by the

81-26  defendant for whom the collateral was accepted, the bail agent or

81-27  any surety insurer having custody of the collateral shall,

81-28  immediately after the bail is forfeited, return to the person who

81-29  deposited the collateral the amount by which the collateral exceeds

81-30  the amount of the bail forfeited. Any collateral returned to a

81-31  person pursuant to this subsection is subject to a claim for fees, if

81-32  any, owed to the bail agent returning the collateral.

81-33     5.  If a bail agent accepts collateral, he shall give a written

81-34  receipt for the collateral. The receipt must include in detail a full

81-35  account of the collateral received.

81-36     Sec. 85.  NRS 697.360 is hereby amended to read as follows:

81-37     697.360  Licensed bail agents, bail solicitors and bail

81-38  enforcement agents, and general agents are also subject to the

81-39  following provisions of this Code, to the extent reasonably

81-40  applicable:

81-41     1.  Chapter 679A of NRS.

81-42     2.  Chapter 679B of NRS.

81-43     3.  NRS 683A.261.

81-44     4.  NRS 683A.301.

81-45     [4.] 5. NRS 683A.311.

82-1      [5.] 6. NRS 683A.341.

82-2      [6.] 7. NRS 683A.361.

82-3      [7.] 8. NRS 683A.400.

82-4      [8.] 9. NRS 683A.451.

82-5      [9.] 10. NRS 683A.461.

82-6      [10.] 11. NRS 683A.480.

82-7      [11.] 12. NRS 683A.500.

82-8      13.  NRS 683A.520.

82-9      [12.] 14. NRS 686A.010 to 686A.310, inclusive.

82-10     Sec. 85.5. NRS 178.512 is hereby amended to read as follows:

82-11     178.512  The court shall not set aside a forfeiture unless:

82-12     1.  The surety submits an application to set it aside on the

82-13  ground that the defendant:

82-14     (a) Has appeared before the court since the date of the forfeiture

82-15  and has presented [a] :

82-16         (1) A satisfactory excuse for his absence; or

82-17         (2) Satisfactory evidence that the surety did not in any way

82-18  cause or aid the absence of the defendant;

82-19     (b) Was dead before the date of the forfeiture but the surety did

82-20  not know and could not reasonably have known of his death before

82-21  that date;

82-22     (c) Was unable to appear before the court before the date of the

82-23  forfeiture because of his illness or his insanity, but the surety did not

82-24  know and could not reasonably have known of his illness or insanity

82-25  before that date;

82-26     (d) Was unable to appear before the court before the date of the

82-27  forfeiture because he was being detained by civil or military

82-28  authorities, but the surety did not know and could not reasonably

82-29  have known of his detention before that date; or

82-30     (e) Was unable to appear before the court before the date of the

82-31  forfeiture because he was deported, but the surety did not know and

82-32  could not reasonably have known of his deportation before that

82-33  date,

82-34  and the court, upon hearing the matter, determines that one or more

82-35  of the grounds described in this subsection exist and that the surety

82-36  did not in any way cause or aid the absence of the defendant; and

82-37     2.  The court determines that justice does not require the

82-38  enforcement of the forfeiture.

82-39     Sec. 86.  NRS 616B.318 is hereby amended to read as follows:

82-40     616B.318  1.  The Commissioner shall impose an

82-41  administrative fine, not to exceed $1,000 for each violation, and:

82-42     (a) Shall withdraw the certification of a self-insured employer if:

82-43         (1) The deposit required pursuant to NRS 616B.300 is not

82-44  sufficient and the employer fails to increase the deposit after he has

82-45  been ordered to do so by the Commissioner;

83-1          (2) The self-insured employer fails to provide evidence of

83-2  excess insurance pursuant to NRS 616B.300 within 45 days after he

83-3  has been so ordered; or

83-4          (3) [The] Except as otherwise provided in subsection 4, the

83-5  employer becomes insolvent, institutes any voluntary proceeding

83-6  under the Bankruptcy Act or is named in any involuntary

83-7  proceeding thereunder.

83-8      (b) May withdraw the certification of a self-insured employer if:

83-9          (1) The employer intentionally fails to comply with

83-10  regulations of the Commissioner regarding reports or other

83-11  requirements necessary to carry out the purposes of chapters 616A

83-12  to 616D, inclusive, and chapter 617 of NRS;

83-13         (2) The employer violates the provisions of subsection 2 of

83-14  NRS 616B.500 or any regulation adopted by the Commissioner or

83-15  the Administrator concerning the administration of the employer’s

83-16  plan of self-insurance; or

83-17         (3) The employer makes a general or special assignment for

83-18  the benefit of creditors or fails to pay compensation after an order

83-19  for payment of any claim becomes final.

83-20     2.  Any employer whose certification as a self-insured employer

83-21  is withdrawn must, on the effective date of the withdrawal, qualify

83-22  as an employer pursuant to NRS 616B.650.

83-23     3.  The Commissioner may, upon the written request of an

83-24  employer whose certification as a self-insured employer is

83-25  withdrawn pursuant to subparagraph (3) of paragraph (a) of

83-26  subsection 1, reinstate the employer’s certificate for a reasonable

83-27  period to allow the employer sufficient time to provide industrial

83-28  insurance for his employees.

83-29     4.  The Commissioner may authorize an employer to retain his

83-30  certification as a self-insured employer during the pendency of a

83-31  proceeding specified in subparagraph (3) of paragraph (a) of

83-32  subsection 1 if the employer establishes to the satisfaction of the

83-33  Commissioner that the employer is able to pay all claims for

83-34  compensation during the pendency of the proceeding.

83-35     Sec. 87.  NRS 616B.336 is hereby amended to read as follows:

83-36     616B.336  1.  Each self-insured employer shall furnish audited

83-37  financial statements, certified by an auditor licensed to do business

83-38  in this state, to the Commissioner [of Insurance annually.] annually

83-39  within 120 days after the expiration of the self-insured employer’s

83-40  fiscal year.

83-41     2.  The Commissioner [of Insurance] may examine the records

83-42  and interview the employees of each self-insured employer as often

83-43  as he deems advisable to determine the adequacy of the deposit

83-44  which the employer has made with the Commissioner, the

83-45  sufficiency of reserves and the reporting, handling and processing of

84-1  injuries or claims. The Commissioner shall examine the records for

84-2  that purpose at least once every 3 years. The self-insured employer

84-3  shall reimburse the Commissioner for the cost of the examination.

84-4      Sec. 88.  NRS 616B.359 is hereby amended to read as follows:

84-5      616B.359  1.  The Commissioner shall grant or deny an

84-6  application for certification as an association of self-insured public

84-7  or private employers within 60 days after receiving the application.

84-8  If the application is materially incomplete or does not comply with

84-9  the applicable provisions of the law, the Commissioner shall notify

84-10  the applicant of the additional information or changes required.

84-11  Under such circumstances, if the Commissioner is unable to act

84-12  upon the application within this 60-day period, he may extend the

84-13  period for granting or denying the application, but for not longer

84-14  than an additional 90 days.

84-15     2.  Upon determining that an association is qualified as an

84-16  association of self-insured public or private employers, the

84-17  Commissioner shall issue a certificate to that effect to the

84-18  association and the Administrator. No certificate may be issued to

84-19  an association that, within the 2 years immediately preceding its

84-20  application, has had its certification as an association of self-insured

84-21  public or private employers involuntarily withdrawn by the

84-22  Commissioner.

84-23     3.  A certificate issued pursuant to this section must include,

84-24  without limitation:

84-25     (a) The name of the association;

84-26     (b) The name of each employer who the Commissioner

84-27  determines is a member of the association at the time of the issuance

84-28  of the certificate;

84-29     (c) An identification number assigned to the association by the

84-30  Commissioner; and

84-31     (d) The date on which the certificate was issued.

84-32     4.  A certificate issued pursuant to this section remains in effect

84-33  until withdrawn by the Commissioner or cancelled at the request of

84-34  the association. Coverage for an association granted a certificate

84-35  becomes effective on the date of certification or the date specified in

84-36  the certificate.

84-37     5.  The Commissioner shall not grant a request to cancel a

84-38  certificate unless the association has insured or reinsured all

84-39  incurred obligations with an insurer authorized to do business in this

84-40  state pursuant to an agreement filed with and approved by the

84-41  Commissioner. The agreement must include coverage for actual

84-42  claims and claims [filed with the association] incurred but not

84-43  reported, and the expenses associated with those claims.

 

 

85-1      Sec. 89.  NRS 616B.386 is hereby amended to read as follows:

85-2      616B.386  1.  If an employer wishes to become a member of

85-3  an association of self-insured public or private employers, the

85-4  employer must:

85-5      (a) Submit an application for membership to the board of

85-6  trustees or third-party administrator of the association; and

85-7      (b) Enter into an indemnity agreement as required by

85-8  NRS 616B.353.

85-9      2.  The membership of the applicant becomes effective when

85-10  each member of the association approves the application or on a

85-11  later date specified by the association. The application for

85-12  membership and the action taken on the application must be

85-13  maintained as permanent records of the board of trustees.

85-14     3.  Each member who is a member of an association during the

85-15  12 months immediately following the formation of the association

85-16  must:

85-17     (a) Have a tangible net worth of at least $500,000; or

85-18     (b) Have had a reported payroll for the previous 12 months

85-19  which would have resulted in a manual premium of at least $15,000,

85-20  calculated in accordance with a manual prepared pursuant to

85-21  subsection 4 of NRS 686B.1765.

85-22     4.  An employer who seeks to become a member of the

85-23  association after the 12 months immediately following the formation

85-24  of the association must meet the requirement set forth in paragraph

85-25  (a) or (b) of subsection 3 unless the Commissioner adjusts the

85-26  requirement for membership in the association after conducting an

85-27  annual review of the actuarial solvency of the association pursuant

85-28  to subsection 1 of NRS 616B.353.

85-29     5.  An association of self-insured private employers may apply

85-30  to the Commissioner for authority to determine the amount of

85-31  tangible net worth and manual premium that an employer must have

85-32  to become a member of the association. The Commissioner shall

85-33  approve the application if the association:

85-34     (a) Has been certified to act as an association for at least the 3

85-35  consecutive years immediately preceding the date on which the

85-36  association filed the application with the Commissioner;

85-37     (b) Has a combined tangible net worth of all members in the

85-38  association of at least $5,000,000;

85-39     (c) Has at least 15 members; and

85-40     (d) Has not been required to meet informally with the

85-41  Commissioner pursuant to subsection 1 of NRS 616B.431 during

85-42  the 18-month period immediately preceding the date on which the

85-43  association filed the application with the Commissioner or, if the

85-44  association has been required to attend such a meeting during that

86-1  period, has not had its certificate withdrawn before the date on

86-2  which the association filed the application.

86-3      6.  An association of self-insured private employers may apply

86-4  to the Commissioner for authority to determine the documentation

86-5  demonstrating solvency that an employer must provide to become a

86-6  member of the association. The Commissioner shall approve the

86-7  application if the association:

86-8      (a) Has been certified to act as an association for at least the 3

86-9  consecutive years immediately preceding the date on which the

86-10  association filed the application with the Commissioner;

86-11     (b) Has a combined tangible net worth of all members in the

86-12  association of at least $5,000,000; and

86-13     (c) Has at least 15 members.

86-14     7.  The Commissioner may withdraw his approval of an

86-15  application submitted pursuant to subsection 5 or 6 if he determines

86-16  the association has ceased to comply with any of the requirements

86-17  set forth in subsection 5 or 6, as applicable.

86-18     8.  A member of an association may terminate his membership

86-19  at any time. To terminate his membership, a member must submit to

86-20  the association’s administrator a notice of intent to withdraw from

86-21  the association at least 120 days before the effective date of

86-22  withdrawal. The [association’s administrator shall, within 10 days

86-23  after receipt of the notice, notify the Commissioner of the

86-24  employer’s] notice of intent to withdraw [from the association.]

86-25  must include a statement indicating that the member has:

86-26     (a) Been certified as a self-insured employer pursuant to

86-27  NRS 616B.312;

86-28     (b) Become a member of another association of self-insured

86-29  public or private employers; or

86-30     (c) Become insured by a private carrier.

86-31     9.  The members of an association may cancel the membership

86-32  of any member of the association in accordance with the bylaws of

86-33  the association.

86-34     10.  The association shall:

86-35     (a) Within 30 days after the addition of an employer to the

86-36  membership of the association, notify the Commissioner of the

86-37  addition and:

86-38         (1) If the association has not received authority from the

86-39  Commissioner pursuant to subsection 5 or 6, as applicable, provide

86-40  to the Commissioner all information and assurances for the new

86-41  member that were required from each of the original members of the

86-42  association upon its organization; or

86-43         (2) If the association has received authority from the

86-44  Commissioner pursuant to subsection 5 or 6, as applicable, provide

86-45  to the Commissioner evidence that is satisfactory to the

87-1  Commissioner that the new member is a member or associate

87-2  member of the bona fide trade association as required pursuant to

87-3  paragraph (a) of subsection 2 of NRS 616B.350, a copy of the

87-4  indemnity agreement that jointly and severally binds the new

87-5  member, the other members of the association and the association

87-6  that is required to be executed pursuant to paragraph (a) of

87-7  subsection 1 of NRS 616B.353 and any other information the

87-8  Commissioner may reasonably require to determine whether the

87-9  amount of security deposited with the Commissioner pursuant to

87-10  paragraph (d) or (e) of subsection 1 of NRS 616B.353 is sufficient,

87-11  but such information must not exceed the information required to be

87-12  provided to the Commissioner pursuant to subparagraph (1);

87-13     (b) Notify the Commissioner and the Administrator of the

87-14  termination or cancellation of the membership of any member of the

87-15  association within 10 days after the termination or cancellation; and

87-16     (c) At the expense of the member whose membership is

87-17  terminated or cancelled, maintain coverage for that member for 30

87-18  days after a notice is given pursuant to paragraph (b), unless the

87-19  association first receives notice from the Administrator that the

87-20  member has:

87-21         (1) Been certified as a self-insured employer pursuant to

87-22  NRS 616B.312;

87-23         (2) Become a member of another association of self-insured

87-24  public or private employers; or

87-25         (3) Become insured by a private carrier.

87-26     11.  If a member of an association changes his name or form of

87-27  organization, the member remains liable for any obligations incurred

87-28  or any responsibilities imposed pursuant to chapters 616A to 617,

87-29  inclusive, of NRS under his former name or form of organization.

87-30     12.  An association is liable for the payment of any

87-31  compensation required to be paid by a member of the association

87-32  pursuant to chapters 616A to 616D, inclusive, or chapter 617 of

87-33  NRS during his period of membership. The insolvency or

87-34  bankruptcy of a member does not relieve the association of liability

87-35  for the payment of the compensation.

87-36     Sec. 90.  NRS 616B.404 is hereby amended to read as follows:

87-37     616B.404  1.  An association of self-insured public or private

87-38  employers shall file with the Commissioner an audited statement of

87-39  financial condition prepared by an independent certified public

87-40  accountant. The statement must be filed on or before [April] May 1

87-41  of each year or within [90] 120 days after the conclusion of the

87-42  association’s fiscal year[,] and must contain information for the

87-43  previous fiscal year.

87-44     2.  The statement required by subsection 1 must be in a form

87-45  prescribed by the Commissioner and include, without limitation:

88-1      (a) A statement of the reserves for:

88-2          (1) Actual claims and expenses;

88-3          (2) Claims [filed with the association] incurred but not

88-4  reported, and the expenses associated with those claims;

88-5          (3) Assessments that are due, but not paid; and

88-6          (4) Unpaid debts, which must be shown as liabilities.

88-7      (b) An actuarial opinion regarding reserves that is prepared by a

88-8  member of the American Academy of Actuaries or another

88-9  specialist in loss reserves identified in the annual statement adopted

88-10  by the National Association of Insurance Commissioners. The

88-11  actuarial opinion must include a statement of:

88-12         (1) Actual claims and the expenses associated with those

88-13  claims; and

88-14         (2) Claims [filed with the association] incurred but not

88-15  reported, and the expenses associated with those claims.

88-16     3.  The Commissioner may adopt a uniform financial reporting

88-17  system for associations of self-insured public and private employers

88-18  to ensure the accurate and complete reporting of financial

88-19  information.

88-20     4.  The Commissioner may require the filing of such other

88-21  reports as he deems necessary to carry out the provisions of this

88-22  section, including, without limitation:

88-23     (a) Audits of the payrolls of the members of an association of

88-24  self-insured public or private employers;

88-25     (b) Reports of losses; and

88-26     (c) Quarterly financial statements.

88-27     Sec. 91.  NRS 616B.413 is hereby amended to read as follows:

88-28     616B.413  1.  If the assets of an association of self-insured

88-29  public or private employers exceed the amount necessary for the

88-30  association to:

88-31     (a) Pay its obligations and administrative expenses;

88-32     (b) Carry reasonable reserves; and

88-33     (c) Provide for contingencies,

88-34  the board of trustees of the association may, after obtaining the

88-35  approval of the Commissioner, declare and distribute dividends to

88-36  the members of the association.

88-37     2.  Any dividend declared pursuant to subsection 1 must be

88-38  distributed not less than 12 months after the end of the [fiscal] fund

88-39  year.

88-40     3.  A dividend may be paid only to those members who are

88-41  members of the association for the entire [fiscal] fund year. The

88-42  payment of a dividend must not be conditioned upon the member

88-43  continuing his membership in the association after the [fiscal] fund

88-44  year.

89-1      4.  An association shall give to each prospective member of the

89-2  association a written description of its plan for distributing

89-3  dividends when he applies for membership in the association.

89-4      Sec. 92.  (Deleted by amendment.)

89-5      Sec. 93.  NRS 616B.419 is hereby amended to read as follows:

89-6      616B.419  Each association of self-insured public or private

89-7  employers shall maintain:

89-8      1.  Actuarially appropriate loss reserves. Such reserves must

89-9  include reserves for:

89-10     (a) Actual claims and the expenses associated with those claims;

89-11  and

89-12     (b) Claims [filed with the association] incurred but not reported,

89-13  and the expenses associated with those claims.

89-14     2.  Reserves for uncollected debts based on the experience of

89-15  the association or other associations.

89-16     Sec. 94.  NRS 616B.422 is hereby amended to read as follows:

89-17     616B.422  1.  If the assets of an association of self-insured

89-18  public or private employers are insufficient to make certain the

89-19  prompt payment of all compensation under chapters 616A to 617,

89-20  inclusive, of NRS and to maintain the reserves required by NRS

89-21  616B.419, the association shall immediately notify the

89-22  Commissioner of the deficiency and:

89-23     (a) Transfer any surplus acquired from a previous [fiscal] fund

89-24  year to the current [fiscal] fund year to make up the deficiency;

89-25     (b) Transfer money from its administrative account to its claims

89-26  account;

89-27     (c) Collect an additional assessment from its members in an

89-28  amount required to make up the deficiency; or

89-29     (d) Take any other action to make up the deficiency which is

89-30  approved by the Commissioner.

89-31     2.  If the association wishes to transfer any surplus from one

89-32  [fiscal] fund year to another, the association must first notify the

89-33  Commissioner of the transfer.

89-34     3.  The Commissioner shall order the association to make up

89-35  any deficiency pursuant to subsection 1 if the association fails to do

89-36  so within 30 days after notifying the Commissioner of the

89-37  deficiency. The association shall be deemed insolvent if it fails to:

89-38     (a) Collect an additional assessment from its members within 30

89-39  days after being ordered to do so by the Commissioner; or

89-40     (b) Make up the deficiency in any other manner within 60 days

89-41  after being ordered to do so by the Commissioner.

89-42     Sec. 95.  The amendatory provisions of sections 56.7 and 56.9

89-43  of this act:

89-44     1.  Do not apply to any contract of annuity that is delivered or

89-45  issued for delivery in this state before October 1, 2003.

90-1      2.  Do not apply to any contract of annuity that is delivered or

90-2  issued for delivery in this state on or after October 1, 2003, and

90-3  before October 1, 2005, unless the company elects to incorporate the

90-4  substance of those amendatory provisions into the contract.

90-5      3.  Apply to any contract of annuity that is delivered or issued

90-6  for delivery in this state on or after October 1, 2005.

90-7      Sec. 96. 1.  The Governor or his designee shall conduct a

90-8  study of the feasibility and potential benefits of consolidating the

90-9  powers and duties of the Division of Insurance of the Department of

90-10  Business and Industry and the Division of Industrial Relations of the

90-11  Department of Business and Industry into a single division within

90-12  the Department of Business and Industry.

90-13     2.  The study must include, without limitation:

90-14     (a) An assessment of whether such a consolidation would

90-15  increase administrative efficiency, improve regulation and result in

90-16  cost savings.

90-17     (b) An assessment of whether such a consolidation would

90-18  benefit the businesses and industries regulated by the Division of

90-19  Insurance and the Division of Industrial Relations.

90-20     3.  Not later than October 1, 2004, the Governor or his designee

90-21  shall prepare a report that contains the findings of the study and

90-22  submit the report and any recommendations for legislation to the

90-23  Director of the Legislative Counsel Bureau for transmittal to:

90-24     (a) The Senators who served as members of the Senate Standing

90-25  Committee on Commerce and Labor during the 72nd Session of the

90-26  Nevada Legislature;

90-27     (b) The Assemblymen who served as members of the Assembly

90-28  Standing Committee on Commerce and Labor during the 72nd

90-29  Session of the Nevada Legislature; and

90-30     (c) Any other Senators or Assemblymen upon request.

90-31     Sec. 97. 1.  This section and section 96 of this act become

90-32  effective upon passage and approval.

90-33     2.  Sections 3.3 and 3.7 of this act become effective:

90-34     (a) Upon passage and approval of this act, if Assembly Bill No.

90-35  79 of this session is enacted into law before passage and approval of

90-36  this act; or

90-37     (b) Upon passage and approval of Assembly Bill No. 79 of this

90-38  session, if Assembly Bill No. 79 of this session is enacted into law

90-39  after passage and approval of this act.

90-40     3.  Sections 56.7 and 56.9 of this act become effective on

90-41  July 1, 2003, for the purpose of adopting regulations and on

90-42  October 1, 2003, for all other purposes.

 

 

91-1      4.  Sections 1, 2, 3, 4 to 56.5, inclusive, and 57 to 95, inclusive,

91-2  of this act become effective on October 1, 2003.

 

91-3  H