Senate Bill No. 319–Senator Shaffer

 

March 17, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes to provisions regulating insurance. (BDR 57‑599)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: Yes.

 

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

 

AN ACT relating to insurance; changing the location where the Commissioner of Insurance may conduct a hearing; providing an exception to the counter-signature requirement for certain types of insurance; revising the membership of certain boards; providing that any refund of an assessment by the Division of Industrial Relations of the Department of Business and Industry must include payment for interest earned; requiring the Commissioner of Insurance to conduct a study relating to the Investments of Insurers Model Act adopted by the National Association of Insurance Commissioners; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. NRS 679B.330 is hereby amended to read as

1-2  follows:

1-3  679B.330  1.  The Commissioner may hold a hearing in

1-4  [Carson City,] Reno, Nevada, or any other place of convenience to

1-5  parties and witnesses, as the Commissioner determines. The

1-6  Commissioner, his deputy or assistant, or a person appointed by

1-7  the Commissioner, shall preside at the hearing, and shall expedite

1-8  the hearing and all procedures involved therein.

1-9  2.  The Commissioner may appoint a person who is not

1-10  associated with the Division to conduct a hearing if the hearing

2-1  requires a disinterested or impartial hearing officer. A person so

2-2  appointed shall comply with the provisions which govern hearings

2-3  conducted by the Commissioner. An order issued by such a person

2-4  has the same effect as an order issued by the Commissioner.

2-5  3.  Testimony may be taken orally or by deposition, and any

2-6  party has the same right to introduce evidence by interrogatories or

2-7  deposition as he would have in a district court.

2-8  4.  Upon good cause shown the Commissioner shall permit to

2-9  become a party to the hearing by intervention, if timely, only such

2-10  persons, not original parties thereto, whose pecuniary interests are to

2-11  be directly and immediately affected by the Commissioner’s order

2-12  made upon the hearing.

2-13      5.  The Commissioner shall cause a record of the proceedings to

2-14  be made. If transcribed, a copy of the record must be part of the

2-15  Commissioner’s record of the hearing and a copy must be furnished

2-16  to any other party to the hearing, at the request and expense of the

2-17  other party. If no such record is transcribed, the Commissioner shall

2-18  prepare a summary record of the proceedings and evidence.

2-19      Sec. 2.  NRS 680A.310 is hereby amended to read as follows:

2-20      680A.310  NRS 680A.300 does not apply to any of the

2-21  following:

2-22      1.  Life insurance and annuities.

2-23      2.  Health insurance.

2-24      3.  Policies covering property in transit while in the possession

2-25  or custody of any common carrier, or the rolling stock or other

2-26  property of any common carrier employed by it in the operation and

2-27  maintenance of its plant and business as a common carrier of freight

2-28  or passengers, or both.

2-29      4.  Reinsurance or retrocessions made by or for authorized

2-30  insurers.

2-31      5.  Bid bonds issued in connection with any public or private

2-32  contract.

2-33      6.  A policy issued to a risk retention group, as defined in NRS

2-34  695E.110, or to a member of a risk retention group.

2-35      7.  A policy issued to a person who is not resident of this state.

2-36      Sec. 3.  NRS 686C.140 is hereby amended to read as follows:

2-37      686C.140  1.  The Board of Directors of the Association

2-38  consists of not less than five nor more than nine members, serving

2-39  terms as established in the plan of operation.

2-40      2.  The members of the Board who represent insurers must be

2-41  selected by member insurers subject to the approval of the

2-42  Commissioner. One of the members of the Board must be the

2-43  officer of a domestic insurer.

2-44      3.  Two public representatives must be appointed to the Board

2-45  by the Commissioner. A public representative may not be an officer,

3-1  director or employee of an insurer or engaged in the business of

3-2  insurance.

3-3  4.  Vacancies on the Board must be filled for the remaining

3-4  period of the term by majority vote of the members of the Board,

3-5  subject to the approval of the Commissioner, for members who

3-6  represent insurers, and by the Commissioner for public

3-7  representatives.

3-8  5.  To select the initial Board of Directors, and initially organize

3-9  the Association, the Commissioner shall give notice to all member

3-10  insurers of the time and place of the organizational meeting. In

3-11  determining voting rights at the organizational meeting, each

3-12  member insurer is entitled to one vote in person or by proxy. If the

3-13  Board of Directors is not selected within 60 days after notice of the

3-14  organizational meeting, the Commissioner may appoint the initial

3-15  members to represent insurers in addition to the public

3-16  representatives.

3-17      [2.] 6.  In approving selections or in appointing members to the

3-18  Board, the Commissioner shall consider, among other things,

3-19  whether all member insurers are fairly represented.

3-20      [3.] 7.  Members of the Board may be reimbursed from the

3-21  assets of the Association for expenses incurred by them as members

3-22  of the Board of Directors but members of the Board may not

3-23  otherwise be compensated by the Association for their services.

3-24      Sec. 4.  NRS 687A.050 is hereby amended to read as follows:

3-25      687A.050  1.  The Board of Directors of the Association shall

3-26  consist of not fewer than five nor more than nine persons. The

3-27  members of the Board shall be appointed by the Commissioner and

3-28  shall serve at his discretion. Vacancies on the Board shall be filled

3-29  in the same manner as initial appointments.

3-30      2.  A majority of the members appointed shall be the designated

3-31  representatives of member insurers. One of the members appointed

3-32  as a designated representative of the member insurers must be the

3-33  officer of a domestic insurer. The Commissioner shall consider

3-34  among other things whether all member insurers are fairly

3-35  represented.

3-36      3.  Members of the Board may be reimbursed from the assets of

3-37  the Association for expenses incurred by them as members of the

3-38  Board of Directors.

3-39      Sec. 5.  Chapter 687B of NRS is hereby amended by adding

3-40  thereto a new section to read as follows:

3-41      Unless otherwise provided by a specific statue, if a signature is

3-42  required of any person, the person may provide as the signature of

3-43  the person:

3-44      1.  An original signature;

3-45      2.  A facsimile signature; or

4-1  3.  An electronic signature pursuant to the provisions of

4-2  chapter 719 of NRS.

4-3  Sec. 6.  NRS 687B.160 is hereby amended to read as follows:

4-4  687B.160  1.  Every insurance policy must be executed in the

4-5  name of and on behalf of the insurer by its officer, attorney in fact,

4-6  employee or representative duly authorized by the insurer.

4-7  2.  [A facsimile signature of any] Any such executing individual

4-8  may [be used] use, in lieu of an original signature[.] :

4-9  (a) A facsimile signature; or

4-10      (b) An electronic signature pursuant to the provisions of

4-11  chapter 719 of NRS.

4-12      3.  An insurance contract issued before, on or after January 1,

4-13  1972, which is otherwise valid is not rendered invalid by reason of

4-14  the apparent execution thereof on behalf of the insurer by the

4-15  imprinted facsimile signature of an individual not authorized so to

4-16  execute as of the date of the policy.

4-17      Sec. 7.  NRS 232.680 is hereby amended to read as follows:

4-18      232.680  1.  The cost of carrying out the provisions of NRS

4-19  232.550 to 232.700, inclusive, and of supporting the Division, a

4-20  full-time employee of the Legislative Counsel Bureau and the Fraud

4-21  Control Unit for Industrial Insurance established pursuant to NRS

4-22  228.420, and that portion of the cost of the Office for Consumer

4-23  Health Assistance established pursuant to NRS 223.550 that is

4-24  related to providing assistance to consumers and injured employees

4-25  concerning workers’ compensation, must be paid from assessments

4-26  payable by each insurer, including each employer who provides

4-27  accident benefits for injured employees pursuant to NRS 616C.265.

4-28      2.  The Administrator shall assess each insurer, including each

4-29  employer who provides accident benefits for injured employees

4-30  pursuant to NRS 616C.265. To establish the amount of the

4-31  assessment, the Administrator shall determine the amount of money

4-32  necessary for each of the expenses set forth in subsections 1 and 4 of

4-33  this section and subsection 3 of NRS 616A.425 and determine the

4-34  amount that is payable by the private carriers, the self-insured

4-35  employers, the associations of self-insured public or private

4-36  employers and the employers who provide accident benefits

4-37  pursuant to NRS 616C.265 for each of the programs. For the

4-38  expenses from which more than one group of insurers receives

4-39  benefit, the Administrator shall allocate a portion of the amount

4-40  necessary for that expense to be payable by each of the relevant

4-41  group of insurers, based upon the expected annual expenditures for

4-42  claims of each group of insurers. After allocating the amounts

4-43  payable among each group of insurers for all the expenses from

4-44  which each group receives benefit, the Administrator shall apply an

4-45  assessment rate to the:

5-1  (a) Private carriers that reflects the relative hazard of the

5-2  employments covered by the private carriers, results in an equitable

5-3  distribution of costs among the private carriers and is based upon

5-4  expected annual premiums to be received;

5-5  (b) Self-insured employers that results in an equitable

5-6  distribution of costs among the self-insured employers and is based

5-7  upon expected annual expenditures for claims;

5-8  (c) Associations of self-insured public or private employers that

5-9  results in an equitable distribution of costs among the associations

5-10  of self-insured public or private employers and is based upon

5-11  expected annual expenditures for claims; and

5-12      (d) Employers who provide accident benefits pursuant to NRS

5-13  616C.265 that reflect the relative hazard of the employments

5-14  covered by those employers, results in an equitable distribution of

5-15  costs among the employers and is based upon expected annual

5-16  expenditures for claims.

5-17  The Administrator shall adopt regulations that establish the formula

5-18  for the assessment and for the administration of payment, and any

5-19  penalties that the Administrator determines are necessary to carry

5-20  out the provisions of this subsection. The formula may use actual

5-21  expenditures for claims. As used in this subsection, the term “group

5-22  of insurers” includes the group of employers who provide accident

5-23  benefits for injured employees pursuant to NRS 616C.265.

5-24      3.  Federal grants may partially defray the costs of the Division.

5-25      4.  Assessments made against insurers by the Division after the

5-26  adoption of regulations must be used to defray all costs and

5-27  expenses of administering the program of workers’ compensation,

5-28  including the payment of:

5-29      (a) All salaries and other expenses in administering the Division,

5-30  including the costs of the office and staff of the Administrator.

5-31      (b) All salaries and other expenses of administering NRS

5-32  616A.435 to 616A.460, inclusive, the offices of the Hearings

5-33  Division of the Department of Administration and the programs of

5-34  self-insurance and review of premium rates by the Commissioner of

5-35  Insurance.

5-36      (c) The salary and other expenses of a full-time employee of the

5-37  Legislative Counsel Bureau whose principal duties are limited to

5-38  conducting research and reviewing and evaluating data related to

5-39  industrial insurance.

5-40      (d) All salaries and other expenses of the Fraud Control Unit for

5-41  Industrial Insurance established pursuant to NRS 228.420.

5-42      (e) Claims against uninsured employers arising from compliance

5-43  with NRS 616C.220 and 617.401.

5-44      (f) That portion of the salaries and other expenses of the Office

5-45  for Consumer Health Assistance established pursuant to NRS

6-1  223.550 that is related to providing assistance to consumers and

6-2  injured employees concerning workers’ compensation.

6-3  5.  If the Division refunds any part of an assessment, the

6-4  Division shall include in that refund any interest earned by the

6-5  Division from the refunded part of the assessment.

6-6  Sec. 8.  NRS 616A.425 is hereby amended to read as follows:

6-7  616A.425  1.  There is hereby established in the State Treasury

6-8  the Fund for Workers’ Compensation and Safety as an enterprise

6-9  fund. All money received from assessments levied on insurers and

6-10  employers by the Administrator pursuant to NRS 232.680 must be

6-11  deposited in this Fund.

6-12      2.  All assessments, penalties, bonds, securities and all other

6-13  properties received, collected or acquired by the Division for

6-14  functions supported in whole or in part from the Fund must be

6-15  delivered to the custody of the State Treasurer for deposit to the

6-16  credit of the Fund.

6-17      3.  All money and securities in the Fund must be used to defray

6-18  all costs and expenses of administering the program of workmen’s

6-19  compensation, including the payment of:

6-20      (a) All salaries and other expenses in administering the Division

6-21  of Industrial Relations, including the costs of the office and staff of

6-22  the Administrator.

6-23      (b) All salaries and other expenses of administering NRS

6-24  616A.435 to 616A.460, inclusive, the offices of the Hearings

6-25  Division of the Department of Administration and the programs of

6-26  self-insurance and review of premium rates by the Commissioner.

6-27      (c) The salary and other expenses of a full-time employee of the

6-28  Legislative Counsel Bureau whose principal duties are limited to

6-29  conducting research and reviewing and evaluating data related to

6-30  industrial insurance.

6-31      (d) All salaries and other expenses of the Fraud Control Unit for

6-32  Industrial Insurance established pursuant to NRS 228.420.

6-33      (e) Claims against uninsured employers arising from compliance

6-34  with NRS 616C.220 and 617.401.

6-35      (f) That portion of the salaries and other expenses of the Office

6-36  for Consumer Health Assistance established pursuant to NRS

6-37  223.550 that is related to providing assistance to consumers and

6-38  injured employees concerning workers’ compensation.

6-39      4.  The State Treasurer may disburse money from the Fund only

6-40  upon written order of the Controller.

6-41      5.  The State Treasurer shall invest money of the Fund in the

6-42  same manner and in the same securities in which he is authorized to

6-43  invest state general funds which are in his custody. Income realized

6-44  from the investment of the assets of the Fund must be credited to the

6-45  Fund.

7-1  6.  The Commissioner shall assign an actuary to review the

7-2  establishment of assessment rates. The rates must be filed with the

7-3  Commissioner 30 days before their effective date. Any insurer or

7-4  employer who wishes to appeal the rate so filed must do so pursuant

7-5  to NRS 679B.310.

7-6  7.  If the Division refunds any part of an assessment, the

7-7  Division shall include in that refund any interest earned by the

7-8  Division from the refunded part of the assessment.

7-9  Sec. 9.  1.  The Commissioner of Insurance shall conduct a

7-10  study to review whether the State of Nevada should enact, in the

7-11  interest of the public:

7-12      (a) The Defined Limits Version of the Investments of Insurers

7-13  Model Act adopted by the National Association of Insurance

7-14  Commissioners;

7-15      (b) The Defined Standards Version of the Investments of

7-16  Insurers Model Act adopted by the National Association of

7-17  Insurance Commissioners; or

7-18      (c) Other legislation regulating the investments of insurers.

7-19      2.  The Commissioner shall seek to obtain all relevant

7-20  information from public and private sources as part of this study.

7-21  Any such information obtained by the Commissioner may only be

7-22  used for the purposes of conducting this study.

7-23      3.  The Commissioner shall complete this study and submit a

7-24  copy of his findings and recommendations on or before January 1,

7-25  2005, to the Director of the Legislative Counsel Bureau for

7-26  distribution to the 73rd Session of the Nevada Legislature.

 

7-27  H