2005 Nevada Revised Statutes - Chapter 686B — Rates and Essential Insurance

CHAPTER 686B - RATES AND ESSENTIALINSURANCE

RATES AND SERVICE ORGANIZATIONS

General Provisions

NRS 686B.010 Constructionand purposes.

NRS 686B.020 Definitions.

NRS 686B.030 Applicability.

NRS 686B.040 Exemptions.

NRS 686B.050 Standards.

NRS 686B.060 Determinationof whether rates comply with standards.

NRS 686B.070 Filingof rates and supplementary information with Commissioner.

NRS 686B.080 Ratesand supplementary information open to public inspection; copies.

NRS 686B.090 Useof rates and supplementary information prepared by rate service organization.

NRS 686B.100 Filingof supporting data.

NRS 686B.110 Disapprovalof rates.

NRS 686B.115 Hearingon rates open to public; cost for transcripts; public testimony.

NRS 686B.117 Interventionin hearing on rates.

NRS 686B.119 Noticeof material change in premiums based upon change in zip code of policyholder.

NRS 686B.125 Limitationon rates for coverage for dental care.

NRS 686B.130 Limitationon services relating to rates of insurance; services of rate serviceorganization and advisory organization to be offered to any insurer.

NRS 686B.140 Licensingof rate service organization and advisory organization: Application; issuance,expiration and renewal of license. [Effective until the date of repeal of thefederal law requiring each state to establish procedures for withholding,suspending and restricting the professional, occupational and recreationallicenses for child support arrearages and for noncompliance with certainprocesses relating to paternity or child support proceedings.]

NRS 686B.140 Licensingof rate service organization and advisory organization: Application; issuance,expiration and renewal of license. [Effective on the date of the repeal of thefederal law requiring each state to establish procedures for withholding,suspending and restricting the professional, occupational and recreationallicenses for child support arrearages and for noncompliance with certainprocesses relating to paternity or child support proceedings.]

NRS 686B.143 Paymentof child support: Statement by applicant for license; grounds for denial oflicense; duty of Commissioner. [Expires by limitation on the date of the repealof the federal law requiring each state to establish procedures for withholding,suspending and restricting the professional, occupational and recreationallicenses for child support arrearages and for noncompliance with certainprocesses relating to paternity or child support proceedings.]

NRS 686B.147 Suspensionof license for failure to pay child support or comply with certain subpoenas orwarrants; reinstatement of license. [Expires by limitation on the date of therepeal of the federal law requiring each state to establish procedures for withholding,suspending and restricting the professional, occupational and recreationallicenses for child support arrearages and for noncompliance with certainprocesses relating to paternity or child support proceedings.]

NRS 686B.150 Bindingagreements by insurers.

NRS 686B.160 Recordingand reporting of experience.

NRS 686B.170 Examinationof service organizations.

NRS 686B.175 Statecontribution for federally reinsured losses.

 

Advisory Organization for Industrial Insurance

NRS 686B.1751 Definitions.

NRS 686B.1752 AdvisoryOrganization defined.

NRS 686B.1753 Basicpremium rate defined.

NRS 686B.1754 Classificationof risks defined.

NRS 686B.1755 Expensesdefined.

NRS 686B.1757 Industrialinsurance defined.

NRS 686B.1759 Insurerdefined.

NRS 686B.176 Planfor rating experience defined.

NRS 686B.17605 Prospectiveloss cost defined.

NRS 686B.1761 Ratedefined.

NRS 686B.1762 Willfuldefined.

NRS 686B.1763 Applicabilityof provisions; Commissioner to administer provisions.

NRS 686B.1764 Designation;duties.

NRS 686B.17645 Dutyto file with Commissioner formula to assess insurers for certain costs;approval of formula.

NRS 686B.1765 Powers.

NRS 686B.1767 Prohibitedacts.

NRS 686B.1769 UniformPlan for Rating Experience: Requirements; use.

NRS 686B.177 Ratinginformation to be filed with Commissioner; approval of rates; Commissioner toreport certain changes to Director of Legislative Counsel Bureau; maximumpermissible variance from approved rate.

NRS 686B.1771 Planfor apportionment among insurers of persons entitled to insurance who have notbeen accepted by an insurer.

NRS 686B.1772 Insurersto adhere to Uniform System of Classifications of Risks and Uniform Plan forRating Experience; subclassifications for Uniform System of Classification.

NRS 686B.1773 Insurersto record and report certain information and adhere to manual of rules andUniform Plan for Rating Experience.

NRS 686B.1774 Commissionerto determine whether interaction among insurers and employers is competitive.

NRS 686B.1775 Filingof rates and supplementary rate information by insurer with Commissioner;findings of Commissioner.

NRS 686B.1777 WhenCommissioner may require supporting information regarding rates; when hearingis required for disapproval of rates.

NRS 686B.1779 Groundsfor disapproval of rates.

NRS 686B.178 Commissionerto issue written order stating reasons for disapproval and date by whichinsurer must discontinue use of rate.

NRS 686B.1781 Paymentof dividends: Prohibition against discrimination; submission of plan forpayments related to industrial insurance.

NRS 686B.1782 Agreementsto lessen competition among insurers prohibited; insurers prohibited fromagreeing to rates established in manner that conflicts with provisions.

NRS 686B.1783 Maintenanceof records; examination of records by Commissioner.

NRS 686B.1784 Examinationby Commissioner; cost of examination.

NRS 686B.1785 Requestfor reconsideration of rates; appeal.

NRS 686B.1787 Insureror advisory organization may request hearing before Commissioner.

NRS 686B.1789 Provisionsgoverning hearing.

NRS 686B.179 Revocationor suspension of license.

NRS 686B.1793 Penalties.

NRS 686B.1797 Insurerprohibited from withholding or giving false or misleading information toCommissioner or Advisory Organization.

NRS 686B.1799 Limitationon liability of insurer or rating organization acting within scope ofemployment.

ESSENTIAL INSURANCE

General Provisions

NRS 686B.180 Unavailabilityof essential coverage; plans for providing coverage.

NRS 686B.185 Immunityof Commissioner and association.

NRS 686B.200 Voluntaryplan for sharing risks.

 

Associations

NRS 686B.210 NevadaEssential Insurance Association: Establishment; membership; plan of operation.

NRS 686B.220 NevadaEssential Insurance Association: Board of Directors; reimbursement of membersof Board; approval or adoption of plan by Commissioner.

NRS 686B.230 NevadaEssential Insurance Association: General powers.

NRS 686B.240 NevadaEssential Insurance Association: Powers of Commissioner and Association.

NRS 686B.250 NevadaEssential Insurance Association: Immunity from liability.

NRS 686B.260 Conversioninto domestic stock insurer: Insured defined.

NRS 686B.270 Conversioninto domestic stock insurer: Applicability of certain provisions governingnonprofit cooperative corporations.

NRS 686B.280 Conversioninto domestic stock insurer: Filing and contents of notice of intent toqualify.

NRS 686B.290 Conversioninto domestic stock insurer: Notice to insurers and insureds; hearing.

NRS 686B.300 Conversioninto domestic stock insurer: Determination of percentage of stock for eachinsured.

NRS 686B.310 Conversioninto domestic stock insurer: Capitalization.

NRS 686B.320 Conversioninto domestic stock insurer: Issuance of certificate of authority.

NRS 686B.330 Conversioninto domestic mutual insurer or domestic reciprocal insurer: Insured defined.

NRS 686B.340 Conversioninto domestic mutual insurer or domestic reciprocal insurer: Exemption fromapplicability of NRS 81.130 and 81.510.

NRS 686B.350 Conversioninto domestic mutual insurer or domestic reciprocal insurer: Filing andcontents of notice of intent to qualify.

NRS 686B.360 Conversioninto domestic mutual insurer or domestic reciprocal insurer: Notice to insurersand insured; hearing.

NRS 686B.370 Conversioninto domestic mutual insurer or domestic reciprocal insurer: Issuance ofcertificate of authority.

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RATES AND SERVICE ORGANIZATIONS

General Provisions

NRS 686B.010 Constructionand purposes.

1. The Legislature intends that NRS 686B.010 to 686B.1799, inclusive, be liberallyconstrued to achieve the purposes stated in subsection 2, which constitute anaid and guide to interpretation but not an independent source of power.

2. The purposes of NRS686B.010 to 686B.1799, inclusive,are to:

(a) Protect policyholders and the public against the adverseeffects of excessive, inadequate or unfairly discriminatory rates;

(b) Encourage, as the most effective way to producerates that conform to the standards of paragraph (a), independent action by andreasonable price competition among insurers;

(c) Provide formal regulatory controls for use ifindependent action and price competition fail;

(d) Authorize cooperative action among insurers in therate-making process, and to regulate such cooperation in order to preventpractices that tend to bring about monopoly or to lessen or destroycompetition;

(e) Encourage the most efficient and economic marketingpractices; and

(f) Regulate the business of insurance in a manner thatwill preclude application of federal antitrust laws.

(Added to NRS by 1971, 1698; A 1985, 1067)

NRS 686B.020 Definitions. As used in NRS686B.010 to 686B.1799, inclusive,unless the context otherwise requires:

1. Advisory organization, except as limited by NRS 686B.1752, means any person ororganization which is controlled by or composed of two or more insurers andwhich engages in activities related to rate making. For the purposes of this subsection,two or more insurers with common ownership or operating in this State undercommon ownership constitute a single insurer. An advisory organization does notinclude:

(a) A joint underwriting association;

(b) An actuarial or legal consultant; or

(c) An employee or manager of an insurer.

2. Market segment means any line or kind ofinsurance or, if it is described in general terms, any subdivision thereof orany class of risks or combination of classes.

3. Rate service organization means any person, otherthan an employee of an insurer, who assists insurers in rate making or filingby:

(a) Collecting, compiling and furnishing loss orexpense statistics;

(b) Recommending, making or filing rates orsupplementary rate information; or

(c) Advising about rate questions, except as anattorney giving legal advice.

4. Supplementary rate information includes anymanual or plan of rates, statistical plan, classification, rating schedule,minimum premium, policy fee, rating rule, rule of underwriting relating torates and any other information prescribed by regulation of the Commissioner.

(Added to NRS by 1971, 1698; A 1985, 1067; 1991,2117; 1995, 2055; 2003,3351)

NRS 686B.030 Applicability.

1. Except as otherwise provided in subsection 2, NRS 686B.010 to 686B.1799, inclusive, apply to all kindsand lines of direct insurance written on risks or operations in this State byany insurer authorized to do business in this State, except:

(a) Ocean marine insurance;

(b) Contracts issued by fraternal benefit societies;

(c) Life insurance and credit life insurance;

(d) Variable and fixed annuities;

(e) Group and blanket health insurance and credithealth insurance;

(f) Property insurance for business and commercialrisks;

(g) Casualty insurance for business and commercialrisks other than insurance covering the liability of a practitioner licensedpursuant to chapters 630 to 640, inclusive, of NRS; and

(h) Surety insurance.

2. The exclusions set forth in paragraphs (f) and (g)of subsection 1 extend only to issues related to the determination or approvalof premium rates.

(Added to NRS by 1971, 1699; A 1971, 1943; 1985,1067; 1993, 2397; 1995, 2056; 2003, 3304)

NRS 686B.040 Exemptions.

1. Except as otherwise provided in subsection 2, theCommissioner may by rule exempt any person or class of persons or any marketsegment from any or all of the provisions of NRS 686B.010 to 686B.1799, inclusive, if and to theextent that he finds their application unnecessary to achieve the purposes ofthose sections.

2. The Commissioner may not, by rule or otherwise,exempt an insurer from the provisions of NRS686B.010 to 686B.1799, inclusive,with regard to insurance covering the liability of a practitioner licensedpursuant to chapter 630, 631, 632 or 633 of NRS for a breach of his professional dutytoward a patient.

(Added to NRS by 1971, 1699; A 1985, 1068; 2003, 919, 3352)

NRS 686B.050 Standards.

1. Rates must not be excessive, inadequate or unfairlydiscriminatory, nor may an insurer charge any rate which if continued will haveor tend to have the effect of destroying competition or creating a monopoly.

2. The Commissioner may disapprove rates if there isnot a reasonable degree of price competition at the consumer level with respectto the class of business to which they apply. In determining whether areasonable degree of price competition exists, the Commissioner shall considerall relevant tests, including:

(a) The number of insurers actively engaged in theclass of business and their shares of the market;

(b) The existence of differentials in rates in thatclass of business;

(c) Whether long-run profitability for insurersgenerally of the class of business is unreasonably high in relation to itsriskiness;

(d) Consumers knowledge in regard to the market inquestion; and

(e) Whether price competition is a result of the marketor is artificial.

Ifcompetition does not exist, rates are excessive if they are likely to produce along-run profit that is unreasonably high in relation to the riskiness of theclass of business, or if expenses are unreasonably high in relation to theservices rendered.

3. Rates are inadequate if they are clearlyinsufficient, together with the income from investments attributable to them,to sustain projected losses and expenses in the class of business to which theyapply.

4. One rate is unfairly discriminatory in relation toanother in the same class if it clearly fails to reflect equitably thedifferences in expected losses and expenses. Rates are not unfairlydiscriminatory because different premiums result for policyholders with similarexposure to loss but different expense factors, or similar expense factors butdifferent exposure to loss, so long as the rates reflect the differences with reasonableaccuracy. Rates are not unfairly discriminatory if they are averaged broadlyamong persons insured under a group, franchise or blanket policy.

(Added to NRS by 1971, 1699; A 1987, 1533)

NRS 686B.060 Determinationof whether rates comply with standards. Indetermining whether rates comply with the standards under NRS 686B.050, the following criteriashall be applied:

1. Due consideration shall be given to past andprospective loss and expense experience within and outside of this state, tocatastrophe hazards and contingencies, to trends within and outside of thisstate, to loadings for leveling premium rates over time or for dividends orsavings to be allowed or returned by insurers to their policyholders, membersor subscribers, and to all other relevant factors, including the judgment oftechnical personnel.

2. Risks may be classified in any reasonable way forthe establishment of rates and minimum premiums, except that classificationsmay not be based on race, color, creed or national origin. Rates thus producedmay be modified for individual risks in accordance with rating plans orschedules which establish reasonable standards for measuring probablevariations in hazards, expenses, or both.

3. The expense provisions included in the rates to beused by an insurer may reflect the operating methods of the insurer and, so faras it is credible, its own expense experience.

4. The rates may contain an allowance permitting aprofit that is not unreasonable in relation to the riskiness of the class ofbusiness.

(Added to NRS by 1971, 1700)

NRS 686B.070 Filingof rates and supplementary information with Commissioner.

1. Every authorized insurer and every rate serviceorganization licensed under NRS 686B.140which has been designated by any insurer for the filing of rates undersubsection 2 of NRS 686B.090 shallfile with the Commissioner all:

(a) Rates and proposed increases thereto;

(b) Forms of policies to which the rates apply;

(c) Supplementary rate information; and

(d) Changes and amendments thereof,

made by itfor use in this state.

2. If an insurer makes a filing for a proposedincrease in a rate for insurance covering the liability of a practitionerlicensed pursuant to chapter 630, 631, 632 or 633 of NRS for a breach of his professional dutytoward a patient, the insurer shall not include in the filing any componentthat is directly or indirectly related to the following:

(a) Capital losses, diminished cash flow from anydividends, interest or other investment returns, or any other financial lossthat is materially outside of the claims experience of the professionalliability insurance industry, as determined by the Commissioner.

(b) Losses that are the result of any criminal orfraudulent activities of a director, officer or employee of the insurer.

If theCommissioner determines that a filing includes any such component, theCommissioner shall, pursuant to NRS686B.110, disapprove the proposed increase, in whole or in part, to theextent that the proposed increase relies upon such a component.

(Added to NRS by 1971, 1700; A 1981, 698; 1987, 1533;1989, 2176; 2003, 919,3352)

NRS 686B.080 Ratesand supplementary information open to public inspection; copies. Each filing and any supporting information filed under NRS 686B.010 to 686B.1799, inclusive, must, as soon asfiled, be open to public inspection at any reasonable time. Copies may beobtained by any person on request and upon payment of a reasonable chargetherefor.

(Added to NRS by 1971, 1700; A 1985, 1068)

NRS 686B.090 Useof rates and supplementary information prepared by rate service organization.

1. An insurer shall establish rates and supplementaryrate information for any market segment based on the factors in NRS 686B.060. If an insurer hasinsufficient creditable loss experience, it may use rates and supplementaryrate information prepared by a rate service organization, with modification forits own expense and loss experience.

2. An insurer may discharge its obligation undersubsection 1 of NRS 686B.070 by givingnotice to the Commissioner that it uses rates and supplementary rate informationprepared by a designated rate service organization, with such information aboutmodifications thereof as are necessary fully to inform the Commissioner. Theinsurers rates and supplementary rate information shall be deemed those filedfrom time to time by the rate service organization, including any amendmentsthereto as filed, subject to the modifications filed by the insurer.

(Added to NRS by 1971, 1701; A 1987, 1534; 2003, 920, 3353)

NRS 686B.100 Filingof supporting data.

1. By rule, the Commissioner may require the filing ofsupporting data as to any or all kinds or lines of insurance or subdivisionsthereof or classes of risks or combinations thereof as he deems necessary forthe proper functioning of the process for monitoring and regulating rates. Thesupporting data must include:

(a) The experience and judgment of the filer, and, tothe extent it wishes or the Commissioner requires, of other insurers or rateservice organizations;

(b) Its interpretation of any statistical data reliedupon;

(c) Descriptions of the actuarial and statisticalmethods employed in setting the rates; and

(d) Any other relevant matters required by theCommissioner.

2. Whenever a filing of a proposed increase in a rateis not accompanied by such information as the Commissioner has required undersubsection 1, he may so inform the insurer and the filing shall be deemed to bemade when the information is furnished.

(Added to NRS by 1971, 1701; A 1985, 1068; 1987,1534; 1989, 601, 2176)

NRS 686B.110 Disapprovalof rates.

1. The Commissioner shall consider each proposedincrease or decrease in the rate of any kind or line of insurance orsubdivision thereof filed with him pursuant to subsection 1 of NRS 686B.070. If the Commissioner findsthat a proposed increase will result in a rate which is not in compliance with NRS 686B.050 or subsection 2 of NRS 686B.070, he shall disapprove theproposal. The Commissioner shall approve or disapprove each proposal no laterthan 60 days after it is determined by him to be complete pursuant tosubsection 4. If the Commissioner fails to approve or disapprove the proposalwithin that period, the proposal shall be deemed approved.

2. Whenever an insurer has no legally effective ratesas a result of the Commissioners disapproval of rates or other act, the Commissionershall on request specify interim rates for the insurer that are high enough toprotect the interests of all parties and may order that a specified portion ofthe premiums be placed in an escrow account approved by him. When new ratesbecome legally effective, the Commissioner shall order the escrowed funds orany overcharge in the interim rates to be distributed appropriately, exceptthat refunds to policyholders that are de minimis must not be required.

3. If the Commissioner disapproves a proposed rate andan insurer requests a hearing to determine the validity of his action, theinsurer has the burden of showing compliance with the applicable standards forrates established in NRS 686B.010 to 686B.1799, inclusive. Any such hearingmust be held:

(a) Within 30 days after the request for a hearing hasbeen submitted to the Commissioner; or

(b) Within a period agreed upon by the insurer and theCommissioner.

If thehearing is not held within the period specified in paragraph (a) or (b), or ifthe Commissioner fails to issue an order concerning the proposed rate for whichthe hearing is held within 45 days after the hearing, the proposed rate shallbe deemed approved.

4. The Commissioner shall by regulation specify thedocuments or any other information which must be included in a proposal toincrease or decrease a rate submitted to him pursuant to subsection 1. Eachsuch proposal shall be deemed complete upon its filing with the Commissioner,unless the Commissioner, within 15 business days after the proposal is filedwith him, determines that the proposal is incomplete because the proposal doesnot comply with the regulations adopted by him pursuant to this subsection.

(Added to NRS by 1971, 1702; A 1987, 1535; 1989,2177; 1991, 1630; 1995, 1415, 1746; 1997, 548; 2003, 920, 3353)

NRS 686B.115 Hearingon rates open to public; cost for transcripts; public testimony.

1. Any hearing held by the Commissioner to determinewhether rates comply with the provisions of NRS686B.010 to 686B.1799, inclusive,must be open to members of the public.

2. All costs for transcripts prepared pursuant to sucha hearing must be paid by the insurer requesting the hearing.

3. At any hearing which is held by the Commissioner todetermine whether rates comply with the provisions of NRS 686B.010 to 686B.1799, inclusive, and which involvesrates for insurance covering the liability of a practitioner licensed pursuantto chapter 630, 631,632 or 633 ofNRS for a breach of his professional duty toward a patient, if a person is nototherwise authorized pursuant to this title to become a party to the hearing byintervention, the person is entitled to provide testimony at the hearing if,not later than 2 days before the date set for the hearing, the person fileswith the Commissioner a written statement which states:

(a) The name and title of the person;

(b) The interest of the person in the hearing; and

(c) A brief summary describing the purpose of thetestimony the person will offer at the hearing.

4. If a person provides testimony at a hearing inaccordance with subsection 3:

(a) The Commissioner may, if he finds it necessary topreserve order, prevent inordinate delay or protect the rights of the partiesat the hearing, place reasonable limitations on the duration of the testimonyand prohibit the person from providing testimony that is not relevant to theissues raised at the hearing.

(b) The Commissioner shall consider all relevanttestimony provided by the person at the hearing in determining whether therates comply with the provisions of NRS686B.010 to 686B.1799, inclusive.

(Added to NRS by 1987, 1532; A 1995, 1623; 2003, 921)

NRS 686B.117 Interventionin hearing on rates. If a filing made with theCommissioner pursuant to paragraph (a) of subsection 1 of NRS 686B.070 pertains to insurancecovering the liability of a practitioner licensed pursuant to chapter 630, 631,632 or 633 ofNRS for a breach of his professional duty toward a patient, any interestedperson, and any association of persons or organization whose members may beaffected, may intervene as a matter of right in any hearing or other proceedingconducted to determine whether the applicable rate or proposed increasethereto:

1. Complies with the standards set forth in NRS 686B.050 and subsection 2 of NRS 686B.070.

2. Should be approved or disapproved.

(Added to NRS by 2003, 3351)

NRS 686B.119 Noticeof material change in premiums based upon change in zip code of policyholder. Each insurer shall notify its policyholders, in a mannerwhich the Commissioner shall prescribe by regulation, if the policyholders premiumsfor insurance will be materially increased or decreased because the zip codeassigned to the address of the policyholder is changed by the United StatesPostal Service.

(Added to NRS by 1991, 2117)

NRS 686B.125 Limitationon rates for coverage for dental care. No insurer,organization or person licensed pursuant to this title may sell or offer tosell any contract providing coverage for dental care at a rate which isexcessive for the benefits offered to the insured or member. For the purpose ofthis section, a ratio of losses to premiums collected which is less than 75percent is presumed to show an excessive rate.

(Added to NRS by 1983, 2028)

NRS 686B.130 Limitationon services relating to rates of insurance; services of rate serviceorganization and advisory organization to be offered to any insurer.

1. A rate service organization and an advisoryorganization shall not provide any service relating to the rates of anyinsurance subject to NRS 686B.010 to 686B.1799, inclusive, and an insurershall not utilize the services of an organization for such purposes unless theorganization has obtained a license pursuant to NRS 686B.140.

2. A rate service organization and an advisoryorganization shall not refuse to supply any services for which it is licensedin this state to any insurer authorized to do business in this state andoffering to pay the fair and usual compensation for the services.

(Added to NRS by 1971, 1702; A 1985, 1069; 1995,2056)

NRS 686B.140 Licensingof rate service organization and advisory organization: Application; issuance,expiration and renewal of license. [Effective until the date of repeal of thefederal law requiring each state to establish procedures for withholding,suspending and restricting the professional, occupational and recreationallicenses for child support arrearages and for noncompliance with certainprocesses relating to paternity or child support proceedings.]

1. A rate service organization or an advisoryorganization applying for a license as required by NRS 686B.130 must include with itsapplication:

(a) A copy of its constitution, charter, articles oforganization, agreement, association or incorporation, and a copy of itsbylaws, plan of operation and any other rules or regulations governing theconduct of its business;

(b) A list of its membership and subscribers;

(c) The name and address of one or more residents ofthis State upon whom notices, process affecting it or orders of theCommissioner may be served;

(d) A statement showing its technical qualificationsfor acting in the capacity for which it seeks a license;

(e) If the applicant is a natural person who wishes toobtain a license as a rate service organization, the statement requiredpursuant to NRS 686B.143;

(f) Any other relevant information and documents that theCommissioner may require; and

(g) The applicable fee.

2. If the applicant is a natural person, theapplication must include the social security number of the applicant.

3. Every organization which has applied for a licensepursuant to subsection 1 shall thereafter promptly notify the Commissioner ofevery material change in the facts or in the documents on which its applicationwas based.

4. If the Commissioner finds that the applicant andthe natural persons through whom it acts are competent, trustworthy andtechnically qualified to provide the services proposed, and that allrequirements of law are met, he shall issue a license specifying the authorizedactivity of the applicant. He shall not issue a license if the proposedactivity would tend to create a monopoly or to lessen or destroy competition inprices.

5. A license issued pursuant to this section continuesin effect until the licensee leaves the State or until the license issuspended, revoked or otherwise terminated. A license may be renewed upon:

(a) If the licensee is a natural person who has beenissued a license as a rate service organization, submission of the statementrequired pursuant to NRS 686B.143 andpayment of the applicable fee for renewal to the Commissioner on or before thelast day on which the license is renewable; or

(b) If the licensee is an advisory organization or arate service organization that is not a natural person, payment of theapplicable fee for renewal to the Commissioner on or before the last day onwhich the license is renewable.

6. A license which is not renewed annually expires onMarch 1. The Commissioner may accept a request for renewal received by himwithin 30 days after the expiration of the license if the request isaccompanied by:

(a) If the licensee is a natural person who has beenissued a license as a rate service organization, the statement requiredpursuant to NRS 686B.143 and a fee forrenewal of 150 percent of the fee otherwise required; or

(b) If the licensee is a rate service organization thatis not a natural person or is an advisory organization, a fee for renewal of150 percent of the fee otherwise required.

7. Any amendment to a document filed pursuant toparagraph (a) of subsection 1 must be filed at least 30 days before it becomeseffective. Failure to comply with this subsection is a ground for revocation ofthe license granted pursuant to subsection 4.

(Added to NRS by 1971, 1702; A 1987, 463; 1995, 2056;1997, 2197, 2210)

NRS 686B.140 Licensing of rate serviceorganization and advisory organization: Application; issuance, expiration andrenewal of license. [Effective on the date of the repeal of the federal lawrequiring each state to establish procedures for withholding, suspending andrestricting the professional, occupational and recreational licenses for childsupport arrearages and for noncompliance with certain processes relating topaternity or child support proceedings.]

1. A rate service organization or an advisoryorganization applying for a license as required by NRS 686B.130 must include with itsapplication:

(a) A copy of its constitution, charter, articles oforganization, agreement, association or incorporation, and a copy of itsbylaws, plan of operation and any other rules or regulations governing theconduct of its business;

(b) A list of its membership and subscribers;

(c) The name and address of one or more residents ofthis state upon whom notices, process affecting it or orders of theCommissioner may be served;

(d) A statement showing its technical qualificationsfor acting in the capacity for which it seeks a license;

(e) Any other relevant information and documents thatthe Commissioner may require; and

(f) The applicable fee.

2. Every organization which has applied for a licensepursuant to subsection 1 shall thereafter promptly notify the Commissioner ofevery material change in the facts or in the documents on which its applicationwas based.

3. If the Commissioner finds that the applicant andthe natural persons through whom it acts are competent, trustworthy andtechnically qualified to provide the services proposed, and that allrequirements of law are met, he shall issue a license specifying the authorizedactivity of the applicant. He shall not issue a license if the proposedactivity would tend to create a monopoly or to lessen or destroy competition inprices.

4. A license issued pursuant to this section continuesin effect until the licensee leaves the state or until the license issuspended, revoked or otherwise terminated. A license may be renewed by paymentof the applicable fee for renewal to the Commissioner on or before the last dayon which it is renewable.

5. A license which is not renewed annually expires onMarch 1. The Commissioner may accept a request for renewal received by himwithin 30 days after the expiration of the license if the request isaccompanied by a fee for renewal of 150 percent of the fee otherwise required.

6. Any amendment to a document filed pursuant toparagraph (a) of subsection 1 must be filed at least 30 days before it becomeseffective. Failure to comply with this subsection is a ground for revocation ofthe license granted pursuant to subsection 3.

(Added to NRS by 1971, 1702; A 1987, 463; 1995, 2056;1997, 2197, 2210, effective on the date of the repeal of the federal lawrequiring each state to establish procedures for withholding, suspending andrestricting the professional, occupational and recreational licenses for childsupport arrearages and for noncompliance with certain processes relating topaternity or child support proceedings)

NRS 686B.143 Paymentof child support: Statement by applicant for license; grounds for denial oflicense; duty of Commissioner. [Expires by limitation on the date of the repealof the federal law requiring each state to establish procedures forwithholding, suspending and restricting the professional, occupational andrecreational licenses for child support arrearages and for noncompliance withcertain processes relating to paternity or child support proceedings.]

1. A natural person who applies for the issuance orrenewal of a license as a rate service organization shall submit to theCommissioner the statement prescribed by the Division of Welfare and SupportiveServices of the Department of Health and Human Services pursuant to NRS 425.520. The statement must becompleted and signed by the applicant.

2. The Commissioner shall include the statementrequired pursuant to subsection 1 in:

(a) The application or any other forms that must besubmitted for the issuance or renewal of the license; or

(b) A separate form prescribed by the Commissioner.

3. A license as a rate service organization may not beissued or renewed by the Commissioner if the applicant is a natural person who:

(a) Fails to submit the statement required pursuant tosubsection 1; or

(b) Indicates on the statement submitted pursuant to subsection1 that he is subject to a court order for the support of a child and is not incompliance with the order or a plan approved by the district attorney or otherpublic agency enforcing the order for the repayment of the amount owed pursuantto the order.

4. If an applicant indicates on the statementsubmitted pursuant to subsection 1 that he is subject to a court order for thesupport of a child and is not in compliance with the order or a plan approvedby the district attorney or other public agency enforcing the order for therepayment of the amount owed pursuant to the order, the Commissioner shalladvise the applicant to contact the district attorney or other public agencyenforcing the order to determine the actions that the applicant may take tosatisfy the arrearage.

(Added to NRS by 1997, 2196)

NRS 686B.147 Suspensionof license for failure to pay child support or comply with certain subpoenas orwarrants; reinstatement of license. [Expires by limitation on the date of therepeal of the federal law requiring each state to establish procedures for withholding,suspending and restricting the professional, occupational and recreationallicenses for child support arrearages and for noncompliance with certainprocesses relating to paternity or child support proceedings.]

1. If the Commissioner receives a copy of a courtorder issued pursuant to NRS 425.540that provides for the suspension of all professional, occupational and recreationallicenses, certificates and permits issued to a person who is the holder of a licenseas a rate service organization, the Commissioner shall deem the license issuedto that person to be suspended at the end of the 30th day after the date onwhich the court order was issued unless the Commissioner receives a letterissued to the holder of the license by the district attorney or other publicagency pursuant to NRS 425.550 statingthat the holder of the license has complied with the subpoena or warrant or hassatisfied the arrearage pursuant to NRS425.560.

2. The Commissioner shall reinstate a license as arate service organization that has been suspended by a district court pursuantto NRS 425.540 if the Commissionerreceives a letter issued by the district attorney or other public agencypursuant to NRS 425.550 to the personwhose license was suspended stating that the person whose license was suspendedhas complied with the subpoena or warrant or has satisfied the arrearagepursuant to NRS 425.560.

(Added to NRS by 1997, 2196)

NRS 686B.150 Bindingagreements by insurers. No insurer shallassume any obligation to any person other than a policyholder or othercompanies under common control to use or adhere to certain rates or rules, andno other person shall impose any penalty or other adverse consequence forfailure of an insurer to adhere to certain rates or rules.

(Added to NRS by 1971, 1703)

NRS 686B.160 Recordingand reporting of experience.

1. The Commissioner may promulgate or approvereasonable rules providing statistical plans for use thereafter by all insurersin the recording and reporting of loss and expense experience, in order thatthe experience of insurers may be made available to him.

2. The Commissioner may designate one or more rateservice organizations to assist him in gathering such experience and makingcompilations thereof, which must be made available to the public.

(Added to NRS by 1971, 1703; A 1987, 1535)

NRS 686B.170 Examinationof service organizations.

1. Whenever he deems it necessary in order to informhimself about any matter related to the enforcement of the insurance laws, theCommissioner may examine the affairs and condition of any rate serviceorganization under subsection 1 of NRS686B.130. So far as reasonably necessary for an examination pursuant tothis subsection, the Commissioner may examine the accounts, records, documentsor evidences of transactions, so far as they relate to the examinee, of anyofficer, manager, general agent, employee, person who has executive authorityover or is in charge of any segment of the examinees affairs, personcontrolling or having a contract under which he has the right to control theexaminee whether exclusively or with others, person who is under the control ofthe examinee, or any person who is under the control of a person who controlsor has a right to control the examinee whether exclusively or with others. Ondemand every examinee under this subsection shall make available to theCommissioner for examination any of its own accounts, records, documents orevidences of transactions and any of those of the persons listed in thissubsection.

2. The Commissioner shall examine every licensed rateservice organization at intervals to be established by rule.

3. In lieu of all or part of an examination conductedpursuant to subsections 1 and 2, or in addition to it, the Commissioner mayorder an independent audit by certified public accountants or actuarialevaluation by actuaries approved by him of any person subject to theexamination requirement. Any accountant or actuary selected is subject to rulesrespecting conflicts of interest promulgated by the Commissioner. Any audit orevaluation conducted pursuant to this subsection is subject to subsections 6 to15, inclusive, so far as appropriate.

4. In lieu of all or part of an examination conductedpursuant to this section, the Commissioner may accept the report of an auditalready made by certified public accountants or actuarial evaluation byactuaries approved by him, or the report of an examination made by theinsurance department of another state.

5. An examination may cover comprehensively allaspects of the examinees affairs and condition. The Commissioner shalldetermine the exact nature and scope of each examination, and in doing so shalltake into account all relevant factors, including but not limited to the lengthof time the examinee has been operating, the length of time he has beenlicensed in this state, the nature of the services provided, the nature of theaccounting records available and the nature of examinations performedelsewhere.

6. For each examination conducted pursuant to thissection, the Commissioner shall issue an order stating the scope of theexamination and designating the examiner in charge. Upon demand a copy of theorder must be exhibited to the examinee.

7. Any examiner authorized by the Commissioner shall,so far as necessary to the purposes of the examination, have access at allreasonable hours to the premises and to any books, records, files, securities,documents or property of the examinee and to those of persons listed insubsection 1 so far as they relate to the affairs of the examinee.

8. The officer, employees and agents of the examineeand of persons listed in subsection 1 shall comply with every reasonablerequest of the examiners for assistance in any matter relating to theexamination. A person shall not obstruct or interfere with the examination inany way other than by legal process.

9. If the Commissioner finds the accounts or recordsto be inadequate for proper examination of the condition and affairs of theexaminee or improperly kept or posted, he may employ experts to rewrite, postor balance them at the expense of the examinee.

10. The examiner in charge of an examination shallmake a proposed report of the examination which must include such informationand analysis as is ordered in subsection 6, together with the examinersrecommendations. Preparation of the proposed report may include conferenceswith the examinee or his representatives at the option of the examiner incharge. The proposed report is confidential until filed in accordance withsubsection 11.

11. The Commissioner shall serve a copy of theproposed report upon the examinee. Within 20 days after service, the examineemay serve upon the Commissioner a written demand for a hearing on the contentsof the report. If a hearing is demanded, the Commissioner shall give notice andhold a hearing pursuant to NRS 679B.310to 679B.370, inclusive, except that ondemand by the examinee the hearing must be private. Within 60 days after thehearing or if no hearing is demanded then within 60 days after the last day onwhich the examinee might have demanded a hearing, the Commissioner shall adoptthe report with any necessary modifications and file it for public inspection,or he shall order a new examination.

12. The Commissioner shall forward a copy of theexamination report to the examinee immediately upon adoption, except that ifthe proposed report is adopted without change, the Commissioner need only sonotify the examinee.

13. The examinee shall forthwith furnish copies of theadopted report to each member of its board of directors or other governingboard.

14. The Commissioner may furnish, without cost or at aprice to be determined by him, a copy of the adopted report to the insurancecommissioner of each state in the United States and of each foreignjurisdiction in which the examinee is licensed and to any other interestedperson in this state or elsewhere.

15. In any proceeding by or against the examinee orany officer or agent thereof the examination report as adopted by theCommissioner is admissible as evidence of the facts stated therein. In anyproceeding by or against the examinee, the facts asserted in any reportproperly admitted in evidence are presumed to be true in the absence ofcontrary evidence.

16. The reasonable costs of an examination conductedpursuant to this section must be paid by the examinee except as otherwiseprovided in subsection 19. These costs include the salary and expenses of eachexaminer and any other expenses which are directly apportioned to theexamination.

17. The amount payable pursuant to subsection 16 isdue 10 days after the examinee has been served a detailed account of the costs.

18. The Commissioner may require any examinee, beforeor from time to time during an examination to deposit with the State Treasurersuch deposits as the Commissioner deems necessary to pay the costs of theexamination. Any deposit and any payment made pursuant to subsections 16 and 17must be deposited in the Insurance Examination Account.

19. On the examinees request or on his own motion,the Commissioner may pay all or part of the costs of an examination whenever hefinds that, because of the frequency of examinations or other factors,imposition of the costs would place an unreasonable burden on the examinee. TheCommissioner shall include in his annual report information about any instancein which he applied this subsection.

20. Deposits and payments made pursuant to subsections16 to 19, inclusive, shall not be deemed to be a tax or license fee within themeaning of any statute. If any other state charges a per diem fee forexamination of examinees domiciled in this state, any examinee domiciled inthat other state shall pay the same fee when examined by the Commissioner ofInsurance of this state.

(Added to NRS by 1971, 1704; A 1977, 811; 1991, 1820)

NRS 686B.175 Statecontribution for federally reinsured losses.

1. The Commissioner is authorized to assess eachinsurance company authorized to do business in this state an aggregate amountsufficient to provide a fund to reimburse the Secretary of Housing and UrbanDevelopment in the manner set forth in section 1223(a)(1) of the NationalHousing Act as amended by section 1103 of the Urban Property Protection andReinsurance Act of 1968, P.L. 90-448, 82 Stat. 476. The assessment shall be onthose lines reinsured during the current year in this state by the Secretary ofHousing and Urban Development pursuant to such act. The assessment shall be inthe proportion that the premiums earned during the preceding calendar year byeach such company in this state bear to the aggregate premiums earned on thoselines in this state by all insurers. The fund may be provided in whole or inpart from appropriations by the Legislature.

2. Rates used by an insurer shall not be deemedexcessive because they contain an amount reasonably calculated to recoupassessments made under this section.

(Added to NRS by 1971, 1707)(Substituted in revisionfor NRS 686B.190)

Advisory Organization for Industrial Insurance

NRS 686B.1751 Definitions. As used in NRS686B.1751 to 686B.1799,inclusive, unless the context otherwise requires, the words and terms definedin NRS 686B.1752 to 686B.1762, inclusive, have the meaningsascribed to them in those sections.

(Added to NRS by 1995, 2049; A 1999, 2220, 3381; 2001, 2256)

NRS 686B.1752 AdvisoryOrganization defined. Advisory Organization,when preceded by the definite article, means the organization designated by theCommissioner pursuant to NRS 686B.1764.

(Added to NRS by 1995, 2049)

NRS 686B.1753 Basicpremium rate defined. Basic premium ratemeans the portion of a rate attributable to the cost of losses per unit ofexposure and includes the expense of adjusting those losses.

(Added to NRS by 1995, 2049)

NRS 686B.1754 Classificationof risks defined. Classification of risksor classification means the system or arrangement used to recognizedifferences of exposure to hazards among employers with different occupations,industries or operations.

(Added to NRS by 1995, 2049)

NRS 686B.1755 Expensesdefined. Expenses means the portion of arate attributable to the costs for the acquisition of employers to insure,supervision of employees and agents, collection of accounts, general expenses,taxes, licenses and fees.

(Added to NRS by 1995, 2049)

NRS 686B.1757 Industrialinsurance defined. Industrial insurancemeans insurance which provides the compensation required by chapters 616A to 617,inclusive, of NRS and employers liability insurance provided in connectionwith that insurance.

(Added to NRS by 1995, 2049)

NRS 686B.1759 Insurerdefined. Insurer means any private carrierauthorized to provide industrial insurance in this state.

(Added to NRS by 1995, 2049; A 1997, 1450; 1999, 444, 1833)

NRS 686B.176 Planfor rating experience defined. Plan forrating experience means a procedure used to predict the future losses of anindividual policyholder by measuring his past losses against the losses ofother policyholders in the same classification to determine any prospectivecredit, debit or unitary modifications of premiums for the individualpolicyholder.

(Added to NRS by 1995, 2049)

NRS 686B.17605 Prospectiveloss cost defined. Prospective loss costmeans the portion of a rate that is based on historical aggregate losses andloss adjustment expenses which are adjusted to their ultimate value andprojected to a future point in time. Except as otherwise provided in thissection, the term does not include provisions for expenses or profit.

(Added to NRS by 1999, 2219)

NRS 686B.1761 Ratedefined. Rate means the cost of insurancebased on a unit of exposure to liability before any adjustments are made for anindividual employers losses, or expenses, or a combination of both. The termdoes not include minimum premiums charged by an insurer.

(Added to NRS by 1995, 2049)

NRS 686B.1762 Willfuldefined. Willful or willfully in relationto an act or omission which constitutes a violation of this chapter means withactual knowledge or belief that the act or omission constitutes a violation andwith specific intent to commit the violation.

(Added to NRS by 1995, 2049)

NRS 686B.1763 Applicabilityof provisions; Commissioner to administer provisions.

1. NRS 686B.1751to 686B.1799, inclusive, apply toinsurers providing industrial insurance and to the Advisory Organizationdesignated by the Commissioner. The Commissioner shall administer theprovisions of these sections.

2. These provisions apply to all industrial insuranceissued in this state except reinsurance.

(Added to NRS by 1995, 2049)

NRS 686B.1764 Designation;duties. The Commissioner shall designate onelicensed advisory organization to act as his statistical agent and to assisthim in compiling relevant statistical information. The designation must be madepursuant to reasonable competitive bidding procedures established by theCommissioner. The Advisory Organization shall:

1. Provide reliable statistics for industrialinsurance.

2. Collect and tabulate information and statistics ina Uniform Statistical Plan, to be approved and used by the Commissioner.

3. Formulate a manual of rules reasonably related tothe recording and reporting of data according to the Uniform Statistical Plan,Uniform Plan for Rating Experience and the Uniform System of Classification,and present the proposed manual to the Commissioner for approval.

(Added to NRS by 1995, 2050)

NRS 686B.17645 Dutyto file with Commissioner formula to assess insurers for certain costs;approval of formula.

1. The Advisory Organization shall, at least 60 daysbefore imposing an assessment pursuant to this section, file with theCommissioner a formula for an assessment on all insurers, which results in anequitable distribution among all insurers, of:

(a) The costs of paying the expenses of the members ofthe appeals panel for industrial insurance pursuant to the provisions of NRS 616B.770; and

(b) Any costs incurred by the Advisory Organization toadminister the appeals panel for industrial insurance pursuant to theprovisions of NRS 616B.760 to 616B.790, inclusive.

2. The formula for the assessment filed pursuant tosubsection 1 shall be deemed approved unless it is disapproved by theCommissioner within 60 days after it is filed.

(Added to NRS by 1999, 3381; A 2001, 2256)

NRS 686B.1765 Powers. The Advisory Organization may:

1. Develop statistical plans including definitions forthe classification of risks.

2. Collect statistical data from its members andsubscribers or any other reliable source.

3. Prepare and distribute data on prospective losscosts.

4. Prepare and distribute manuals of rules andschedules for rating which do not permit calculating the final rates withoutusing information other than the information in the manual.

5. Distribute any information filed with theCommissioner which is open to public inspection.

6. Conduct research and collect statistics todiscover, identify and classify information on the causes and prevention oflosses.

7. Prepare and file forms and endorsements forpolicies and consult with its members, subscribers and any other knowledgeablepersons on their use.

8. Collect, compile and distribute information on thepast and current premiums charged by individual insurers if the information isavailable for public inspection.

9. Conduct research and collect information todetermine what effect changes in benefits to injured employees pursuant to chapters 616A to 617,inclusive, of NRS will have on prospective loss costs.

10. Prepare and distribute rules and rating values forthe Uniform Plan for Rating Experience.

11. Calculate and provide to the insurer themodification of premiums based on the individual employers losses.

12. Assist an individual insurer to develop rates,supplementary rate information or other supporting information if authorized todo so by the insurer.

(Added to NRS by 1995, 2050; A 1997, 1450, 1451; 1999, 444, 2220, 2224; 2001, 154)

NRS 686B.1767 Prohibitedacts. An advisory organization shall not:

1. Compile or distribute recommendations concerningrates which include expenses, other than expenses to adjust losses or profit;or

2. File rates, supplementary rate information orsupporting information on behalf of an insurer.

(Added to NRS by 1995, 2050; A 1997, 1451, 1452; 1999, 444, 2224)

NRS 686B.1769 UniformPlan for Rating Experience: Requirements; use.

1. The Uniform Plan for Rating Experience must:

(a) Contain reasonable standards for eligibility in thePlan;

(b) Provide adequate incentives for employers toprevent losses; and

(c) Permit sufficient differences in an insurerspremiums to encourage safety at the employers place of business.

2. The Plan must be the exclusive basis for adjustingfuture premiums by evaluating an individual employers characteristics whichtend to produce losses, but an insurer may file a rating plan that provides foran adjustment of premiums retrospectively based on an individual employerspast experience of losses.

(Added to NRS by 1995, 2051)

NRS 686B.177 Ratinginformation to be filed with Commissioner; approval of rates; Commissioner toreport certain changes to Director of Legislative Counsel Bureau; maximumpermissible variance from approved rate.

1. The Advisory Organization shall file with theCommissioner a copy of every prospective loss cost, every manual of ratingrules, every rating schedule and every change, amendment or modification tothem which is proposed for use in this state at least 60 days before they aredistributed to the organizations members, subscribers or other persons. Therates shall be deemed to be approved unless they are disapproved by theCommissioner within 60 days after they are filed.

2. The Commissioner shall report any changes in ratesor in the Uniform Plan for Rating Experience, the Uniform Statistical Plan orthe Uniform System of Classification, when approved, to the Director of theLegislative Counsel Bureau.

(Added to NRS by 1995, 2051; A 1997, 1452; 1999, 444, 2221, 2224; 2001, 154)

NRS 686B.1771 Planfor apportionment among insurers of persons entitled to insurance who have notbeen accepted by an insurer.

1. No insurer is required to issue to any particularemployer a policy for industrial insurance.

2. The Commissioner shall approve a plan submitted bythe Advisory Organization for equitable apportionment among insurers of thosepersons who in good faith are entitled to insurance but who have not beenaccepted by an insurer. Every insurer shall participate in the plan. TheCommissioner shall adopt regulations to carry out the plan.

3. The Advisory Organization shall submit to theCommissioner the rates, supplementary rate information and forms for policiesfor the plan at least 60 days before they become effective. The rates submittedto the Commissioner must:

(a) Reflect the experience of the persons insuredpursuant to the plan to the extent that those rates are actuariallyappropriate.

(b) Be actuarially determined to ensure that the planis self-sustaining.

4. The Commissioner shall disapprove any rates for theplan which do not meet the standards of NRS686B.050. The rates shall be deemed to be approved unless they aredisapproved by the Commissioner within 60 days after they are filed pursuant tothe procedures in NRS 686B.1775.

(Added to NRS by 1995, 2051; A 1997, 973; 1999, 428)

NRS 686B.1772 Insurersto adhere to Uniform System of Classifications of Risks and Uniform Plan forRating Experience; subclassifications for Uniform System of Classification.

1. Every insurer shall adhere to the Uniform System ofClassifications of Risks and Uniform Plan for Rating Experience filed with theCommissioner by the Advisory Organization.

2. Any insurer may develop a subclassification orsubclassifications for the Uniform System of Classification. Anysubclassification must be filed with the Commissioner 60 days before it becomeseffective. The Commissioner shall disapprove the subclassification if theinsurer fails to show the data to be produced by it will be consistent with theUniform Statistical Plan and System of Classification filed by the AdvisoryOrganization with the Commissioner.

(Added to NRS by 1995, 2051)

NRS 686B.1773 Insurersto record and report certain information and adhere to manual of rules andUniform Plan for Rating Experience.

1. Every insurer shall:

(a) Record and report its experience and losses forpolicies of industrial insurance to the Advisory Organization in a formconsistent with the Uniform Statistical Plan approved by the Commissioner; and

(b) Adhere to the manual of rules and Uniform Plan forRating Experience when providing or reporting its business for industrialinsurance.

2. No insurer may agree with another insurer or theAdvisory Organization to adhere to a manual of rules which is not reasonablyrelated to the recording or reporting of data according to the UniformStatistical Plan or Uniform System of Classifications filed by the AdvisoryOrganization.

(Added to NRS by 1995, 2051)

NRS 686B.1774 Commissionerto determine whether interaction among insurers and employers is competitive.

1. The Commissioner shall determine whether theinteraction among insurers and employers for the buying and selling ofindustrial insurance is competitive. Competition among these insurers ispresumed to exist unless the Commissioner specifically finds, after a hearingand review of the structure, performance and conduct of the insurers, thatthere is no reasonable degree of competition among them and that theinteraction is not competitive. Any finding by the Commissioner that there isno competition among the insurers and that the interaction is not competitive,expires 1 year after the date it is issued.

2. To determine whether competition exists amonginsurers, the Commissioner shall review existing information available to himor participate in the development of new sources of such information. He mayconduct his own studies, cooperate with knowledgeable officers in other states,hire outside consultants or conduct studies in any other appropriate manner.

(Added to NRS by 1995, 2052; A 1997, 1456; 1999, 2224)

NRS 686B.1775 Filingof rates and supplementary rate information by insurer with Commissioner;findings of Commissioner.

1. Each insurer shall file with the Commissioner allthe rates, supplementary rate information, supporting data, and changes andamendments thereof, except any information filed by the Advisory Organization,which the insurer intends to use in this state. An insurer may adopt byreference any supplementary rate information or supporting data that has beenpreviously filed by that insurer and approved by the Commissioner. The filingmust indicate the date the rates will become effective. An insurer may file itsrates pursuant to this subsection by filing:

(a) Final rates; or

(b) A multiplier and, if used by an insurer, a premiumcharged to each policy of industrial insurance regardless of the size of thepolicy which, when applied to the prospective loss costs filed by the AdvisoryOrganization pursuant to NRS 686B.177,will result in final rates.

2. Each insurer shall file the rates, supplementaryrate information and supporting data pursuant to subsection 1:

(a) Except as otherwise provided in subsection 4, ifthe interaction among insurers and employers is presumed or found to becompetitive, not later than 15 days before the date the rates become effective.

(b) If the Commissioner has issued a finding that theinteraction is not competitive, not later than 60 days before the rates becomeeffective.

3. If the information supplied by an insurer pursuantto subsection 1 is insufficient, the Commissioner shall notify the insurer andrequire the insurer to provide additional information. The filing must not bedeemed complete or available for use by the insurer and review by theCommissioner must not commence until all the information requested by theCommissioner is received by him. If the requested information is not receivedby the Commissioner within 60 days after its request, the filing may bedisapproved without further review.

4. If, after notice to the insurer and a hearing, theCommissioner finds that an insurers rates require supervision because of theinsurers financial condition or because of rating practices which are unfairlydiscriminatory, the Commissioner shall order the insurer to file its rates,supplementary rate information, supporting data and any other informationrequired by the Commissioner, at least 60 days before they become effective.

5. For any filing made by an insurer pursuant to thissection, the Commissioner may authorize an earlier effective date for the ratesupon a written request from the insurer.

6. Except as otherwise provided in subsection 1, everyrate filed by an insurer must be filed in the form and manner prescribed by theCommissioner.

7. As used in this section, supporting data means:

(a) The experience and judgment of the insurer and ofother insurers or of the Advisory Organization, if relied upon by the insurer;

(b) The interpretation of any statistical data reliedupon by the insurer;

(c) A description of the actuarial and statisticalmethods employed in setting the rates; and

(d) Any other relevant matters required by the Commissioner.

(Added to NRS by 1995, 2052; A 1997, 1453; 1999, 444, 2221, 2224; 2001, 154)

NRS 686B.1777 WhenCommissioner may require supporting information regarding rates; when hearingis required for disapproval of rates.

1. If the Commissioner finds that:

(a) The interaction among insurers is not competitive;

(b) The rates filed by insurers whose interaction iscompetitive are inadequate or unfairly discriminatory; or

(c) The rates violate the provisions of this chapter,

theCommissioner may require the insurers to file information supporting theirexisting rates. Before the Commissioner may disapprove those rates, he shallnotify the insurers and hold a hearing on the rates and the supplementary rateinformation.

2. The Commissioner may disapprove any rate without ahearing. Any insurer whose rates are disapproved in this manner may request inwriting and within 30 days after the disapproval that the Commissioner conducta hearing on the matter.

(Added to NRS by 1995, 2053; A 1997, 1454; 1999, 444, 2222, 2224; 2001, 154)

NRS 686B.1779 Groundsfor disapproval of rates.

1. The Commissioner may disapprove a rate filed by aninsurer at any time.

2. The Commissioner shall disapprove a rate if:

(a) An insurer has failed to meet the requirements forfiling a rate pursuant to this chapter or the regulations of the Commissioner;

(b) The rate is inadequate or unfairly discriminatoryand the interaction among insurers and employers is competitive; or

(c) A rate is inadequate, excessive or unfairlydiscriminatory and the Commissioner has found and issued an order that theinteraction among the insurers and employers is not competitive.

(Added to NRS by 1995, 2053; A 1997, 1455; 1999, 444, 2223, 2224; 2001, 154)

NRS 686B.178 Commissionerto issue written order stating reasons for disapproval and date by whichinsurer must discontinue use of rate. If theCommissioner disapproves a rate, he shall issue a written order stating thereasons for the disapproval and stating the date when the rate must no longerbe used for policies which are issued or renewed. The date established by theCommissioner must be within a reasonable period after the written order isissued. The Commissioner shall issue his order within 30 days after thehearing. The Commissioner may require that the premiums be adjusted after thedate of the order for those policies in effect on the date of his order.

(Added to NRS by 1995, 2053)

NRS 686B.1781 Paymentof dividends: Prohibition against discrimination; submission of plan forpayments related to industrial insurance.

1. An insurer shall not unfairly discriminate amongits policyholders in paying a dividend, savings, unearned premium deposits oran equivalent abatement of premiums allowed or returned by an insurer for apolicy of industrial insurance.

2. A plan for the payment of dividends for industrialinsurance must be filed before there is a dividend payment. The plan shall bedeemed approved unless the Commissioner disapproves the plan within 30 daysafter it is filed and received by the Commissioner. An insurer shall notcondition the payment of a dividend upon the renewal of a policy or contract bythe policyholder, member or subscriber.

3. An insurer paying savings, unearned premiumdeposits or an equivalent abatement for premiums allowed or returned for a policyof industrial insurance must receive prior approval.

(Added to NRS by 1995, 2053; A 2003, 3305)

NRS 686B.1782 Agreementsto lessen competition among insurers prohibited; insurers prohibited fromagreeing to rates established in manner that conflicts with provisions.

1. No insurer or advisory organization may make anyagreement with any person, insurer or advisory organization to restrain tradeunreasonably or to lessen substantially the competition between insurers.

2. No insurer may agree to use any rate, rating planor rating rules, other than the uniform plan for rating experience, except asnecessary to comply with the provisions of this chapter concerning the activityof the Advisory Organization and insurers relating to the Uniform StatisticalPlan, the Uniform Plan for Rating Experience and the Uniform System ofClassifications of Risks and the development of subclassifications.

3. The fact that two or more insurers, whether or notthey subscribe to the Advisory Organization, use consistently or intermittentlythe same rates, rating plans, rating schedules, rating rules, classificationsfor rates, rules for underwriting, surveys, inspections or similar materialsdoes not require a finding by the Commissioner that an agreement to restraintrade or lessen competition exists.

4. Two or more insurers which are commonly owned oroperated in this state with common management or control may act or agree toact among themselves as if they were a single insurer for any activitiesauthorized by NRS 686B.1751 to 686B.1799, inclusive.

(Added to NRS by 1995, 2053)

NRS 686B.1783 Maintenanceof records; examination of records by Commissioner. Everyinsurer, advisory organization and plan for apportioned risks shall maintainrecords of the kind reasonably adapted to its method of operation andreflecting its experience or the experience of its members and the data orother information collected or used by it. The Commissioner may examine thoserecords at any reasonable time to determine whether the activities of theinsurer, advisory organization or plan for apportioned risks comply with theprovisions of this chapter and chapters 616Ato 617, inclusive, of NRS. These records mustbe maintained in an office in this state or must be made available to theCommissioner for his examination or inspection at any time after reasonablenotice to the insurer, advisory organization or plan for apportioned risks.

(Added to NRS by 1995, 2054)

NRS 686B.1784 Examinationby Commissioner; cost of examination.

1. The Commissioner may examine any insurer, advisoryorganization or plan for apportioned risks whenever he determines that such anexamination is necessary.

2. The reasonable cost of an examination must be paidby the insurer or other person examined upon presentation by the Commissionerof an accounting of those costs pursuant to NRS679B.290.

3. In lieu of an examination, the Commissioner mayaccept the report of an examination made by the agency of another state thatregulates insurance.

(Added to NRS by 1995, 2054; A 1999, 2223)

NRS 686B.1785 Requestfor reconsideration of rates; appeal. Anyperson aggrieved by any decision, action or omission of the AdvisoryOrganization or an insurer regarding rates or other information filed with theCommissioner may request in writing that the Organization or insurer reconsiderthe decision, action or omission. Except as otherwise provided in NRS 616B.772, 616B.775 and 616B.787, if the request forreconsideration is rejected or is not acted upon within 30 days by theOrganization or insurer, the person requesting reconsideration may, within 30days thereafter, appeal from the decision, action or omission to theCommissioner by filing a written complaint and request for a hearing specifyingthe grounds relied upon.

(Added to NRS by 1995, 2054; A 1999, 3381; 2001, 2256)

NRS 686B.1787 Insureror advisory organization may request hearing before Commissioner. Any insurer or advisory organization, to which is directedany order made or action taken by the Commissioner without a hearing, mayrequest a hearing before the Commissioner.

(Added to NRS by 1995, 2054)

NRS 686B.1789 Provisionsgoverning hearing. A hearing required by anyof the provisions of NRS 686B.1751 to686B.1799, inclusive, is governed by NRS 679B.310 to 679B.370, inclusive, except that anylimits of time imposed by NRS 686B.1751to 686B.1799, inclusive, control.

(Added to NRS by 1995, 2054)

NRS 686B.179 Revocationor suspension of license. The Commissionermay, after notice and hearing, revoke or suspend the license of an advisoryorganization for failure to comply with the provisions of this chapter.

(Added to NRS by 1995, 2055)

NRS 686B.1793 Penalties.

1. An insurer or other person who violates anyprovision of NRS 686B.1751 to 686B.1799, inclusive, shall, upon theorder of the Commissioner, pay an administrative fine not to exceed $1,000 foreach violation and not to exceed $10,000 for each willful violation. Theseadministrative fines are in addition to any other penalty provided by law. Anyinsurer using a rate before it has been filed with the Commissioner as requiredby NRS 686B.1775, shall be deemed tohave committed a separate violation for each day the insurer failed to file therate.

2. The Commissioner may suspend or revoke the licenseof any advisory organization or insurer who fails to comply with an orderwithin the time specified by the Commissioner or any extension of that timemade by the Commissioner. Any suspension of a license is effective for the timestated by the Commissioner in his order or until the order is modified, rescindedor reversed.

3. The Commissioner, by written order, may impose apenalty or suspend a license pursuant to this section only after written noticeto the insurer, organization or plan for apportioned risks and a hearing.

(Added to NRS by 1995, 2055; A 1999, 2223)

NRS 686B.1797 Insurerprohibited from withholding or giving false or misleading information toCommissioner or Advisory Organization. An insureror other person shall not willfully withhold information from, or knowinglygive false or misleading information to, the Commissioner or to the Advisory Organization,which will affect the rates, classifications of risks or Uniform StatisticalPlan for industrial insurance.

(Added to NRS by 1995, 2055)

NRS 686B.1799 Limitationon liability of insurer or rating organization acting within scope ofemployment. No insurer or rating organizationor member thereof in its capacity as a member or officer or employee of thelicensed rating organization when acting within the scope of his employment isliable for injury or death or other damage proximately caused by a failure toinspect, or the manner or extent of inspection of, an employers locations,plants or operations for classification, control of losses or rating, or bythat persons comment or failure to comment on the subject matter or object ofthe inspection.

(Added to NRS by 1995, 2055)

ESSENTIAL INSURANCE

General Provisions

NRS 686B.180 Unavailabilityof essential coverage; plans for providing coverage.

1. If the Commissioner finds after a hearing that inany part of this state any essential insurance coverage is not readilyavailable in the voluntary market, and that the public interest requires suchavailability, he may by regulation promulgate plans to provide such insurancecoverages for any risks in this state which are equitably entitled to butotherwise unable to obtain such coverage, or may call upon insurers to prepareplans for his approval. Such plans may also include any kind of reinsurancethat is unavailable and that would facilitate making essential insurancecoverage available where it would otherwise not be available.

2. The plan promulgated or prepared under subsection 1must:

(a) Give consideration to the need for adequate andreadily accessible coverage, alternative methods of improving the marketaffected, the preferences of the insurers and agents, the inherent limitationsof the insurance mechanism, the need for reasonable underwriting standards, andthe requirement of reasonable loss-prevention measures;

(b) Establish procedures that will create minimuminterference with the voluntary market;

(c) Spread the burden imposed by the facility equitablyand efficiently among insurers; and

(d) Establish procedures for applicants andparticipants to have grievances reviewed by an impartial body.

3. Each plan must require participation by allinsurers doing any business in this state of the kinds covered by the specificplan and all agents licensed to represent such insurers in this state for thespecified kinds of business, except that the Commissioner may exclude kinds ofinsurance, classes of insurers or classes of persons for administrativeconvenience or because it is not equitable or practicable to require them toparticipate in the plan.

4. The plan may provide for optional participation byinsurers not required to participate under subsection 3.

5. Each plan must provide for the method ofunderwriting and classifying risks, making and filing rates, adjusting andprocessing claims and any other insurance or investment function that isnecessary for the purpose of providing essential insurance coverage.

6. In providing for the recoupment of deficits whichmay be incurred in the plan, an option must be offered to an insured eachpolicy year to pay a capital stabilization charge which must not exceed 100percent of the premium charged to the insured in that year. The Commissionershall determine the amount of the charge from appropriate factors of lossexperience and risk associated with the plan and the insured. An insured whopays the stabilization charge must not be required to pay any assessment torecoup a deficit in the plan incurred in any policy year for which the chargeis paid. The plan must provide for the return to the insured of so much of hispayment as remains after all actual or potential liabilities under the policyhave been discharged.

7. The plan must specify the basis of participationand assessment of insurers as necessary and must provide for the participationof agents and the conditions under which risks must be accepted.

8. Every participating insurer and agent shall provideto any person seeking coverages of kinds available in the plans the servicesprescribed in the plans, including full information on the requirements andprocedures for obtaining coverage under the plans whenever the business is notplaced in the voluntary market.

9. The plan must specify what commission rates must bepaid for business placed in the plans.

10. If the Commissioner finds that the lack ofcooperating insurers or agents in an area makes the functioning of the plandifficult, he may order that the plan set up a branch service office or takeother appropriate steps to insure that service is available.

(Added to NRS by 1971, 1706; A 1975, 402; 1977, 303;1985, 1069)

NRS 686B.185 Immunityof Commissioner and association. There is noliability on the part of, and no cause of action of any nature arises against,the Commissioner or his representatives or any essential insurance association,its agents or employees, under a plan established pursuant to the provisions ofNRS 686B.180, for any good faithaction taken by them in the performance of their powers and duties under suchplan.

(Added to NRS by 1975, 403)

NRS 686B.200 Voluntaryplan for sharing risks. Insurers doingbusiness within this state are authorized to prepare voluntary plans providingany specified kind, line or class of insurance coverage or subdivision orcombination thereof for all or any part of this state in which such insuranceis not readily available in the voluntary market and in which the publicinterest requires the availability of such coverage. Such plans shall besubmitted to the Commissioner and if approved by him may be put into operation.

(Added to NRS by 1971, 1707)

Associations

NRS 686B.210 NevadaEssential Insurance Association: Establishment; membership; plan of operation.

1. If after a hearing the Commissioner determines thata voluntary or mandatory plan would, in his judgment, fail for any reason toprovide essential insurance coverage, he may, by regulation, establish anonprofit unincorporated legal entity to be known as the Nevada EssentialInsurance Association. All insurers required to participate pursuant tosubsection 3 of NRS 686B.180 shallbecome members of the Association as a condition of their authority to transactinsurance in this state.

2. The Association shall perform its functions under aplan of operation established by regulations promulgated by the Commissionerpursuant to subsection 1 of NRS 686B.180.

(Added to NRS by 1975, 398)

NRS 686B.220 NevadaEssential Insurance Association: Board of Directors; reimbursement of membersof Board; approval or adoption of plan by Commissioner.

1. The administrative powers of the Nevada EssentialInsurance Association shall be vested in a Board of Directors consisting of notless than five nor more than nine members serving terms as established in theplan of organization. The members of the Board shall be appointed by the Commissionerwith due consideration given to the composition of the membership of theAssociation and to the interests of the insureds who are provided essentialinsurance coverage by the Association.

2. Members of the Board may be reimbursed from theassets of the Association for expenses incurred by them as members of the Boardof Directors and for reasonable and equitable compensation as may be prescribedby the terms of the plan of organization.

3. The Board of Directors of the Association shallsubmit to the Commissioner a plan of organization for the Association and makesuitable or necessary amendments thereto to assure the fair, reasonable andequitable administration of the Association. The plan of operation shall becomeeffective upon approval in writing by the Commissioner.

4. If the Association fails to submit a suitable planof operation within a reasonable period of time, or if at any time thereafterthe Association fails to submit suitable amendments to the plan, theCommissioner shall promulgate a plan as necessary or advisable to effectuatethe provisions of this section.

(Added to NRS by 1975, 398)

NRS 686B.230 NevadaEssential Insurance Association: General powers.

1. The Nevada Essential Insurance Association has, forpurposes of this section and to the extent approved by the Commissioner, thegeneral powers and authority granted under the laws of this state to carrierslicensed to transact the kinds of insurance defined in NRS 681A.020 to 681A.080, inclusive.

2. The Association may take any necessary action tomake available necessary insurance, including but not limited to, thefollowing:

(a) Assess participating insurers amounts necessary topay the obligations of the Association, administration expenses, the cost ofexaminations conducted pursuant to NRS687A.110 and other expenses authorized by this chapter. The assessment ofeach member insurer for the kind or kinds of insurance designated in the planmust be in the proportion that the net direct written premiums of the memberinsurer for the preceding calendar year bear to the net direct written premiumsof all member insurers for the preceding calendar year. A member insurer maynot be assessed in any year an amount greater than 5 percent of his net directwritten premiums for the preceding calendar year. Each member insurer must beallowed a premium tax credit at the rate of 20 percent per year for 5successive years beginning on the first day of the calendar year after thecalendar year in which the insurer pays the assessment pursuant to thissubsection.

(b) Enter into such contracts as are necessary orproper to carry out the provisions and purposes of this section.

(c) Sue or be sued, including taking any legal actionnecessary to recover any assessments for, on behalf of or against participatingcarriers.

(d) Investigate claims brought against the fund andadjust, compromise, settle and pay covered claims to the extent of theAssociations obligation and deny all other claims. Process claims through itsemployees or through one or more member insurers or other persons designated asservicing facilities. Designation of a service facility is subject to theapproval of the Commissioner, but such a designation may be declined by amember insurer.

(e) Classify risks as may be applicable and equitable.

(f) Establish appropriate rates, rate classificationsand rating adjustments and file those rates with the Commissioner in accordancewith this chapter.

(g) Administer any type of reinsurance program for oron behalf of the Association or any participating carriers.

(h) Pool risks among participating carriers.

(i) Issue and market, through agents, policies ofinsurance providing the coverage required by this section in its own name or onbehalf of participating carriers.

(j) Administer separate pools, separate accounts or otherplans as may be deemed appropriate for separate carriers or groups of carriers.

(k) Invest, reinvest and administer all funds andmoneys held by the Association.

(l) Borrow funds needed by the Association to carry outthe purposes of this section.

(m) Develop, effectuate and promulgate anyloss-prevention programs aimed at the best interests of the Association and theinsuring public.

(n) Operate and administer any combination of plans,pools, reinsurance arrangements or other mechanisms as deemed appropriate tobest accomplish the fair and equitable operation of the Association for thepurposes of making available essential insurance coverage.

3. In providing for the recoupment of a deficit of theAssociation, an option must be offered to an insured each policy year to pay acapital stabilization charge which must not exceed 100 percent of the premiumcharged to the insured in that year. The Board of Directors shall determine theamount of the charge from appropriate factors of loss experience and riskassociated with the Association and the insured. An insured who pays thestabilization charge must not be required to pay any assessment to recoup adeficit of the Association incurred in any policy year for which the charge ispaid. The Associations plan of operation must provide for the return to theinsured of so much of his payment as remains after all actual or potentialliabilities under the policy have been discharged.

(Added to NRS by 1975, 398; A 1977, 305; 2003, 3305)

NRS 686B.240 NevadaEssential Insurance Association: Powers of Commissioner and Association. The Commissioner and the Nevada Essential InsuranceAssociation may:

1. Give consideration to the need for adequate andreadily accessible coverage, to alternative methods of improving the marketaffected, to the preferences of the insurers and agents, to the inherentlimitations of the insurance mechanism, to the need for reasonable underwritingstandards and to the requirement of reasonable loss-prevention measures.

2. Establish procedures that will create minimuminterference with the voluntary market.

3. Spread the burden imposed by the facility equitablyand efficiently.

4. Establish procedures for applicants andparticipants to have grievances reviewed.

5. Take all reasonable and necessary steps to dissolvethe Association at the earliest date when essential insurance becomes readilyavailable in the private market. The dissolution of the Association, includingits assets and liabilities, must be accomplished under the supervision of theCommissioner in an equitable and reasonable manner. The dissolution must, ifdetermined to be appropriate by the Commissioner, provide for the repayment ofany loans or other money provided or contributed by the State of Nevada for theformation or continuance of the Association.

(Added to NRS by 1975, 399; A 2003, 3306)

NRS 686B.250 NevadaEssential Insurance Association: Immunity from liability. There is no liability on the part of, and no cause ofaction of any nature arises against, the Nevada Essential Insurance Associationor its agents or employees, members of the Board or the Commissioner or hisrepresentatives for any good faith performance of their powers and duties underNRS 686B.210 to 686B.240, inclusive.

(Added to NRS by 1975, 400)

NRS 686B.260 Conversioninto domestic stock insurer: Insured defined. Asused in NRS 686B.270 to 686B.320, inclusive, unless the contextotherwise requires, insured means any person who has maintained at least 1year of coverage with an essential insurance association.

(Added to NRS by 1981, 1021)

NRS 686B.270 Conversioninto domestic stock insurer: Applicability of certain provisions governingnonprofit cooperative corporations. The provisionsof NRS 81.130 and 81.510 do not apply to the conversion of anessential insurance association to a domestic stock insurer as provided in NRS 686B.280 to 686B.320, inclusive.

(Added to NRS by 1981, 1023; A 1985, 1878; 1991,1318)

NRS 686B.280 Conversioninto domestic stock insurer: Filing and contents of notice of intent toqualify.

1. An essential insurance association shall, wheneverrequested to do so by the Commissioner, file a notice of intent to qualify as adomestic stock insurer. In the absence of a request by the Commissioner, anessential insurance association may file such a notice whenever it considers itappropriate.

2. The notice must be filed with the Commissioner atleast 4 months before the date the association is to become a domestic stockinsurer and must contain:

(a) An application prepared pursuant to chapter 680A of NRS for a certificate ofauthority to transact business in Nevada as a domestic stock insurer;

(b) A valuation of capital and surplus according toboth market and amortized value based on the associations annual financialstatement for the previous year;

(c) The value and number of shares of stock to whicheach insured is entitled; and

(d) The terms of any proposal offering money or itsequivalent in lieu of issuing fractional shares.

(Added to NRS by 1981, 1021)

NRS 686B.290 Conversioninto domestic stock insurer: Notice to insurers and insureds; hearing.

1. At the time the association files a notice ofintent to qualify as a domestic stock insurer, it must give notice of itsintent to all participating insurers and all insureds on a form approved by theCommissioner. The notice to each insured must state the total amount of stockto be issued and the amount of shares to which he is entitled.

2. Any participating insurer or insured may, within 30days after the date of the notice, apply to the Division for a hearingconcerning the associations ability to qualify as a domestic insurer, thevaluation of capital and surplus, or the proposed number and distribution ofshares of stock.

(Added to NRS by 1981, 1022; A 1991, 1630; 1993,1917; 2003, 3307)

NRS 686B.300 Conversioninto domestic stock insurer: Determination of percentage of stock for eachinsured. The association shall determine thepercentage of stock to which each insured is entitled as follows:

1. The amount of gain or loss from operations,including an equitable allocation of investment income attributable tooperations, is calculated for each of the following groups:

(a) Insureds who have not paid a capital stabilizationcharge;

(b) Insureds who have paid this charge for a givenpolicy year; and

(c) Insureds who have paid a single charge to cover allpolicy years of participation in the association.

2. For each calendar year the association has been inoperation, the amount of gain or loss from operations, including an equitableallocation of investment income attributable to each group, is divided by thenumber of insured months in that group.

3. For each group in which an insured participated inany calendar year, his number of insured months in that group is multiplied bythe amount of income per insured month attributable to that group, asdetermined in subsection 2.

4. For each insured, the results of the calculationsperformed under subsection 3 for each group in which the insured was a memberduring a particular calendar year are added.

5. For each insured, the total amount he paid incapital stabilization charges is computed.

6. For each insured, the sum of the results of thecalculations performed under subsections 4 and 5 are divided by the totalsurplus of the association as shown in its financial statement for the yearpreceding its conversion to a domestic stock insurer, to obtain that insuredspercentage of ownership of the total stock to be distributed.

(Added to NRS by 1981, 1022)

NRS 686B.310 Conversioninto domestic stock insurer: Capitalization. Anassociation must comply with the provisions of NRS 680A.120 to qualify as a domesticstock insurer. Any paid-in capital in excess of the minimum amount required maybe shown as surplus.

(Added to NRS by 1981, 1023)

NRS 686B.320 Conversioninto domestic stock insurer: Issuance of certificate of authority. Upon determining that the Association has complied with NRS 686B.280 to 686B.310, inclusive, and all otherrequirements applicable to domestic stock insurers, the Commissioner may issueto the Association a certificate of authority to transact business as adomestic stock insurer.

(Added to NRS by 1981, 1023; A 2003, 3307)

NRS 686B.330 Conversioninto domestic mutual insurer or domestic reciprocal insurer: Insured defined. As used in NRS686B.330 to 686B.370, inclusive,unless the context otherwise requires, insured has the meaning ascribed to itin NRS 686B.260.

(Added to NRS by 2003, 3303)

NRS 686B.340 Conversioninto domestic mutual insurer or domestic reciprocal insurer: Exemption fromapplicability of NRS 81.130 and 81.510. Theprovisions of NRS 81.130 and 81.510 do not apply to the conversion of anessential insurance association to a domestic mutual insurer or a domesticreciprocal insurer as provided in NRS686B.330 to 686B.370, inclusive.

(Added to NRS by 2003, 3304)

NRS 686B.350 Conversioninto domestic mutual insurer or domestic reciprocal insurer: Filing andcontents of notice of intent to qualify.

1. An essential insurance association shall, ifrequested to do so by the Commissioner, file a notice of intent to qualify as adomestic mutual insurer or a domestic reciprocal insurer. In the absence of arequest by the Commissioner, an essential insurance association may file such anotice at such time as the association determines appropriate.

2. The notice must be filed with the Commissioner atleast 4 months before the date the association is to become a domestic mutualinsurer or a domestic reciprocal insurer and must include:

(a) An application prepared pursuant to chapter 680A of NRS for a certificate ofauthority to transact business in Nevada as a domestic mutual insurer or adomestic reciprocal insurer;

(b) A valuation of the policyholders surplus accordingto both market and amortized value based on the associations annual financialstatement for the previous year; and

(c) A provision for the return of any unused portion ofthe insureds capital stabilization charges.

(Added to NRS by 2003, 3304)

NRS 686B.360 Conversioninto domestic mutual insurer or domestic reciprocal insurer: Notice to insurersand insured; hearing.

1. At the time the association files a notice ofintent to qualify as a domestic mutual insurer or domestic reciprocal insurer,it must give a notice of intent to all participating insurers and all insuredson a form approved by the Commissioner.

2. Any participating insurer or insured may, within 30days after the date of the notice, apply to the Division for a hearingconcerning the associations ability to qualify as a domestic mutual insurer ordomestic reciprocal insurer.

3. An association must comply with the provisions of:

(a) Chapter 692B ofNRS, as applicable to mutual insurers, to qualify as a domestic mutual insurer;or

(b) Chapter 694B ofNRS, as applicable to reciprocal insurers, to qualify as a domestic reciprocalinsurer.

(Added to NRS by 2003, 3304)

NRS 686B.370 Conversioninto domestic mutual insurer or domestic reciprocal insurer: Issuance ofcertificate of authority. Upon determiningthat an association has complied with NRS686B.330 to 686B.370, inclusive,and all other requirements applicable to domestic mutual insurers, if theassociation is qualifying as a domestic mutual insurer, or to domesticreciprocal insurers, if the association is qualifying as a domestic reciprocalinsurer, the Commissioner may issue to the association a certificate of authorityto transact business as a domestic mutual insurer or a domestic reciprocalinsurer.

(Added to NRS by 2003, 3304)

 

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