Senate Bill No. 378–Committee on Judiciary

 

March 17, 2003

____________

 

Referred to Committee on Judiciary

 

SUMMARY—Revises provisions relating to cancellation or nonrenewal of policy of insurance issued to common-interest community. (BDR 10‑1053)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: No.

 

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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; revising provisions relating to the notice that must be provided when an insurer cancels or refuses to renew a policy of insurance issued to a common-interest community; 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 116.31133 is hereby amended to read as

1-2  follows:

1-3  116.31133  1.  Insurance policies carried pursuant to NRS

1-4  116.3113 must provide to the extent reasonably available that:

1-5  (a) Each unit’s owner is an insured person under the policy with

1-6  respect to liability arising out of his interest in the common elements

1-7  or membership in the association;

1-8  (b) The insurer waives its right to subrogation under the policy

1-9  against any unit’s owner or member of his household;

1-10      (c) No act or omission by any unit’s owner, unless acting within

1-11  the scope of his authority on behalf of the association, will void the

1-12  policy or be a condition to recovery under the policy; and

1-13      (d) If, at the time of a loss under the policy, there is other

1-14  insurance in the name of a unit’s owner covering the same risk

1-15  covered by the policy, the association’s policy provides primary

1-16  insurance.

2-1  2.  Any loss covered by the property policy under subsections 1

2-2  and 2 of NRS 116.3113 must be adjusted with the association, but

2-3  the proceeds for that loss are payable to any trustee designated for

2-4  that purpose, or otherwise to the association, and not to any holder

2-5  of a security interest. The trustee or the association shall hold any

2-6  proceeds in trust for the association, units’ owners and lienholders

2-7  as their interests may appear. Subject to the provisions of NRS

2-8  116.31135, the proceeds must be disbursed first for the repair or

2-9  restoration of the damaged property, and the association, units’

2-10  owners, and [liens holders] lienholders are not entitled to receive

2-11  payment of any portion of the proceeds unless there is a surplus of

2-12  proceeds after the property has been completely repaired or restored,

2-13  or the common-interest community is terminated.

2-14      3.  An insurer that has issued an insurance policy under this

2-15  section shall issue certificates or memoranda of insurance to the

2-16  association and, upon written request, to any unit’s owner or holder

2-17  of a security interest. The insurer issuing the policy may not cancel

2-18  or refuse to renew it until 30 days after notice of the proposed

2-19  cancellation or nonrenewal has been mailed to the association[,

2-20  each unit’s owner and each holder of a security interest] and to any

2-21  person to whom a certificate or memorandum of insurance has been

2-22  issued at their respective last known addresses.

 

2-23  H