2005 Nevada Revised Statutes - Chapter 693B — Continuity of Management During Emergency Resulting From Attack

CHAPTER 693B - CONTINUITY OF MANAGEMENTDURING EMERGENCY RESULTING FROM ATTACK

NRS 693B.010 Definitions.

NRS 693B.020 Adoptionof bylaws for emergency: Procedure; provisions; approval.

NRS 693B.030 Changeof location of principal office; notice to Commissioner.

NRS 693B.040 Boardmeetings: Call; notice.

NRS 693B.050 Emergencyboard of directors: Numbers; authorized action.

NRS 693B.060 Emergencyboard of directors: Powers.

NRS 693B.070 Commissionerto be notified of meetings of emergency board of directors.

NRS 693B.080 Actingdirectors: Qualifications; oaths not required.

NRS 693B.090 Actingdirectors: Powers; compensation.

NRS 693B.100 Actingofficers: Powers, duties and compensation.

NRS 693B.110 Designationof acting directors by Commissioner.

NRS 693B.120 Powerof Commissioner to resolve controversy concerning actions of emergency board ofdirectors.

NRS 693B.130 Commissionermay declare certain provisions of law operative and inoperative; powers ofcompanies, officers and directors.

NRS 693B.140 Commissionermay take possession of business and property of organizations.

NRS 693B.150 Commissionerto exercise powers only if court not available to make necessary orders;regulations, directives and orders of Commissioner.

NRS 693B.160 Presumptionof acute emergency; powers of board or emergency board of directors.

NRS 693B.170 Effectof chapter on organizations power and on foreign and alien companies.

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NRS 693B.010 Definitions. As used in this chapter, unless the context otherwiserequires:

1. Acting Director means an acting Director electedor appointed in accordance with this chapter.

2. Acting officer means an acting officer appointedin accordance with this chapter.

3. Acute emergency means a period in which, byreason of loss of life, epidemic disease, destruction or damage of property,contamination of property by radiological, chemical or bacteriological means,or disruption of the means of transportation and communication, resulting froman attack, it is impossible or impracticable for the business of insurance inthis state to be conducted in strict accord with the provisions of law orcharters applicable thereto.

4. Attack means any attack, actual or imminent, orseries of attacks by an enemy or a foreign nation upon the United States ofAmerica causing, or which may cause, substantial damage or injury to civilianproperty or persons in the United States in any manner by sabotage or by theuse of bombs, shellfire, or atomic, radiological, chemical, bacteriological orbiological means or other weapons or processes.

5. Board means the board of directors, board oftrustees, committee or similar body having control of the affairs of anorganization.

6. Charter means the certificate of organization orincorporation of an organization together with its bylaws, or the agreementestablishing a fund or association together with its constitution and bylaws.

7. Commissioner means the Commissioner of Insuranceor other person designated to exercise the powers of that office during anacute emergency.

8. Director means a director, trustee or member of aboard.

9. Domestic organization means any organization whichis domiciled in this state, including, insofar as the provisions of thischapter may appropriately apply thereto, any welfare or pension fund or UnitedStates branch of an alien insurer.

10. Officer means an officer of a domesticorganization.

11. Organization means any insurer, ratingorganization, service or advisory organization, joint underwriting associationor other organization which is subject, in whole or in part, to the insurancelaws of this state.

12. Quorum means the minimum number of directorsrequired by charter and law, other than this chapter, to be present for validaction to be taken at a meeting of a board with respect to each particular itemof business which may come before such meeting.

(Added to NRS by 1971, 1818)

NRS 693B.020 Adoptionof bylaws for emergency: Procedure; provisions; approval.

1. With the approval of the Commissioner, any domesticorganization may at any time adopt, in the same manner as in the case ofordinary bylaws, emergency bylaws to become operative during a period of acuteemergency. Emergency bylaws may contain provisions with respect to the numberof directors capable of acting which shall constitute its board, the number ofsuch directors which shall constitute a quorum at a meeting of the board, thenumber of votes necessary for action by such board, the manner in whichvacancies on the board shall be filled, the line of succession of its officers,and the interim management of the affairs of the organization.

2. Such provisions, if approved by the Commissioner,need not comply with the requirements of the charter of such domesticorganization.

3. Except as provided in NRS 693B.120, the provisions of NRS 693B.040 to 693B.100, inclusive, 693B.120 and 693B.130 shall not be applicable during aperiod of acute emergency to any domestic organization operating in accordancewith emergency bylaws approved by the Commissioner to the extent that theprocedure set forth in such emergency bylaws relate to subject matter containedin NRS 693B.040 to 693B.100, inclusive.

(Added to NRS by 1971, 1818)

NRS 693B.030 Changeof location of principal office; notice to Commissioner. Any domestic organization, without complying with anyprovision of law requiring approval, or application for approval, of a changeof location of its principal office may from time to time change the locationthereof during an acute emergency to a suitable location within the UnitedStates, and may carry on its business at such new location during such acuteemergency and for a reasonable time thereafter. Any organization which changesthe location of its principal office during an acute emergency shall notify theCommissioner thereof in writing as soon as practicable, stating the address ofthe new location, the address of the former location, and the dates whenbusiness is ceasing at the former location and commencing at the latterlocation.

(Added to NRS by 1971, 1819)

NRS 693B.040 Boardmeetings: Call; notice. Notwithstanding any contraryprovision of law or of its charter, if at any time during an acute emergency affectingany domestic organization, no person otherwise empowered to call meetings ofits board is capable of acting, a meeting thereof may be called by any directoror acting director, or if no director or acting director is capable of acting,by any officer or acting officer. If it is impracticable or impossible to givenotice of a meeting of the board in the manner prescribed by charter and law,the person calling such a meeting may give notice thereof by making suchreasonable efforts as circumstances may permit to notify each director andacting director of the time and place of the meeting, but need not specify thepurposes thereof. Failure of any director or acting director to receive actualnotice of a meeting of directors and acting directors shall not affect thepower of the directors and acting directors present at such meeting to exercisethe powers of an emergency board of directors as prescribed in this section.Nothing contained in this chapter shall be construed as requiring a meeting ofthe board of such an organization to be convened in any manner different fromthat prescribed by its charter and by the provisions of law other than thischapter.

(Added to NRS by 1971, 1819)

NRS 693B.050 Emergencyboard of directors: Numbers; authorized action. Ifthree or more directors or acting directors of any domestic organization arepresent at any meeting of its board duly convened during an acute emergencyaffecting such domestic organization, they shall constitute its emergency boardof directors which, notwithstanding any contrary provision of law or of itscharter, may, subject to the limitation prescribed in this chapter, by amajority of those present, take any action which may be necessary to enablesuch domestic organization to meet the exigencies of the acute emergency andconduct its business during such period.

(Added to NRS by 1971, 1820)

NRS 693B.060 Emergencyboard of directors: Powers. The powers of anemergency board of directors shall include, but shall not be limited to, thefollowing:

1. At any meeting to elect such acting directors as itmay deem necessary, without regard to the number of directors which wouldotherwise be required, to serve in any positions on such board which are vacantor in place of any directors or acting directors who are absent from suchmeeting, but not to elect any director on a permanent basis.

2. To elect such acting officers as it may deemnecessary, without regard to the number of officers which would otherwise berequired, to serve in any offices which are vacant or in place of any officersor acting officers who fail to appear and assume their duties, to fix thecompensation and determine the powers and duties of acting officers and toremove acting officers, but not to remove any officer or fill any vacancy on apermanent basis or to cause the organization to enter into any contract ofemployment for a term of over 1 year.

3. To cause the organization to change the location ofits principal office, pursuant to NRS693B.030, or any of its places of business, and to authorize such action asit may deem appropriate to acquire space and facilities at the new locations,but not to acquire for use as its principal office property in fee or for aterm of over 1 year.

4. To postpone any meeting of the stockholders,policyholders, members or directors of such organization if, in the judgment ofthe members of such emergency board of directors, it would be impracticable tohold such meeting at the time it would otherwise have been held or conducted.

5. If it appears to an emergency board of directorsthat a quorum of the board cannot be assembled within a reasonable time, tocall a meeting of the stockholders, policyholders or members of theorganization to be held as soon as the circumstances may reasonably permit, ata place to be designated by the emergency board of directors within this stateor a contiguous state, for the purpose of electing directors to fill vacancieson the board, but for no other purpose, and to propose nominees for suchelection. Any such meeting of stockholders, policyholders or members shall beheld upon notice given in accordance with the charter of the organization andapplicable law other than this chapter.

(Added to NRS by 1971, 1820)

NRS 693B.070 Commissionerto be notified of meetings of emergency board of directors. As soon as practicable after each meeting of an emergencyboard of directors, the person who presided thereat shall notify theCommissioner in writing of the time and place of such meeting, of the manner inwhich notice thereof was given, of the persons present, and of all actionstaken at such meeting.

(Added to NRS by 1971, 1821)

NRS 693B.080 Actingdirectors: Qualifications; oaths not required. Noperson prohibited by law or by the charter of a domestic organization fromserving as a member of its board shall be eligible to serve as an actingdirector except that no person shall be disqualified to serve as an actingdirector by reason of his not being a stockholder, policyholder or member ofsuch organization, by reason of his not being a resident of this state or of acontiguous state, or by reason of the number of the directors or actingdirectors who are officers, acting officers or employees of the organization.Any person may serve as an acting director of a fund who is a director, actingdirector, officer or acting officer of an organization which is party to theagreement creating the fund. No oath of acting directors shall be required.

(Added to NRS by 1971, 1821)

NRS 693B.090 Actingdirectors: Powers; compensation. Actingdirectors elected pursuant to the provisions of NRS 693B.060, or appointed pursuant tothe provisions of NRS 693B.110, shallbe entitled to notice of and to vote at all meetings of an emergency board ofdirectors equally with directors. Acting directors shall not be entitled totake part in the deliberations or to vote at any meeting of the board which isduly convened in accordance with the applicable provisions of its charter andof law other than this chapter, and at which a quorum is present. Each actingdirector shall serve until the director or acting director in whose place hewas elected or appointed attends a meeting of the board or until a director isduly elected to fill the vacancy in which such acting director has beenserving, whichever event occurs earlier. An acting director shall be entitledto the compensation, if any, payable to a director.

(Added to NRS by 1971, 1821)

NRS 693B.100 Actingofficers: Powers, duties and compensation. Actingofficers elected pursuant to NRS 693B.060shall have such powers and duties and receive such compensation as may from timeto time be determined by the board or emergency board of directors. Each actingofficer shall serve until the officer in whose place he was elected appears andassumes his duties or until his successor officer or acting officer is elected,whichever event occurs earlier.

(Added to NRS by 1971, 1821)

NRS 693B.110 Designationof acting directors by Commissioner. If, atany time during an acute emergency, the number of directors or acting directorsof a domestic organization who are capable of acting is less than three, theCommissioner may designate additional acting directors in such number as willbring to three the number of directors and acting directors who are capable ofacting.

(Added to NRS by 1971, 1822)

NRS 693B.120 Powerof Commissioner to resolve controversy concerning actions of emergency board ofdirectors. To resolve controversy as to thepower of any group of persons purporting to act as an emergency board ofdirectors so to act, the Commissioner may, upon a determination that suchaction will tend to promote the safe and sound and orderly conduct of thebusiness of any domestic organization, issue orders declaring that any suchgroup shall or shall not have the powers of an emergency board of directors, orconfirming, modifying or vacating in whole or in part any action taken orpurportedly taken by any such group, or removing any acting director.

(Added to NRS by 1971, 1822)

NRS 693B.130 Commissionermay declare certain provisions of law operative and inoperative; powers ofcompanies, officers and directors.

1. At any time after an attack, upon his determinationthat such action will tend to promote certainty as to the powers oforganizations or individuals pursuant to this chapter, or that such action isdesirable to enable organizations to take preparatory precautions prior to theoccurrence of an acute emergency, the Commissioner may declare that anyprovision of this chapter which he may specify shall be operative with respectto any domestic organization or to the Nevada business of any otherorganization which he may designate. Upon such declaration such organizationand its directors, officers, acting directors and acting officers shall haveall powers conferred by such provisions of this chapter. The failure of theCommissioner so to declare shall not be deemed to limit the powers of anyorganization or its directors, officers, acting directors or acting officerswhere an acute emergency exists in fact.

2. At any time after the commencement of an acuteemergency or after the Commissioner has declared any provision of this chapteroperative pursuant to subsection 1, upon his determination that an organizationis able, in whole or in part, to carry on its business in compliance with itscharter and the laws other than this chapter, the Commissioner may declare thatany provision of this chapter which he may specify shall be inoperative withrespect to any domestic organization or to the Nevada business of any otherorganization which he may designate. Upon such declaration, such organizationshall be governed by its charter and the provisions of law other than thischapter except insofar as other provisions of this chapter remain operative.

(Added to NRS by 1971, 1822)

NRS 693B.140 Commissionermay take possession of business and property of organizations. Upon the Commissioners determination that, as a result ofan acute emergency, the business and affairs of an organization cannototherwise be conducted in a safe and sound manner, he may forthwith takepossession of the business and property of the organization within this stateor, if a domestic organization, its business and property wherever situated.The provisions of chapter 696B of NRS(conservation, rehabilitation, liquidation) shall be applicable in any case inwhich the Commissioner takes possession of an organization pursuant to thissection as though the organization were an insurer of which the Commissionerhad taken possession pursuant to chapter 696Bof NRS (conservation, rehabilitation, liquidation), except that no suchprovision shall be applicable which the Commissioner has declared inapplicablepursuant to this section. The Commissioner shall have power to declareinapplicable any such provision upon his determination that the same isinappropriate or unnecessary to protect the interests of the public or thestockholders or creditors of the organization, in view of the acute emergencyand the nature of the organization.

(Added to NRS by 1971, 1823)

NRS 693B.150 Commissionerto exercise powers only if court not available to make necessary orders;regulations, directives and orders of Commissioner.

1. The powers given the Commissioner by NRS 693B.120 and 693B.140 shall be exercised by him onlyif there is no court of competent jurisdiction available to which anapplication can be made for an order permitting him to exercise such powerswith respect to a particular organization, but the powers conferred by NRS 693B.140 shall not be exercised inthe case of an organization which is not insolvent within the meaning of NRS 696B.210, unless the Commissioner findsthat such organization lacks personnel able to manage its business in theinterests of the public, its stockholders and policyholders.

2. The Commissioner may issue general and specificregulations, directives and orders consistent with and in furtherance of thepurposes of this chapter.

(Added to NRS by 1971, 1823)

NRS 693B.160 Presumptionof acute emergency; powers of board or emergency board of directors.

1. In any action or proceeding it shall be presumedthat an acute emergency existing within any city or county within the stateconstitutes an acute emergency affecting every organization doing businesswithin such city or county.

2. During an acute emergency:

(a) The board of a domestic organization which hasadopted emergency bylaws, approved by the Commissioner, shall have the powersconferred by such bylaws and, except as provided in subsection 1 of NRS 693B.130, shall, to the extent thatsuch bylaws relate to the subject matter contained in NRS 693B.040 to 693B.100, inclusive, have no other ordifferent powers with respect to such subject matter.

(b) The board of a domestic organization which has notadopted emergency bylaws, approved by the Commissioner, shall have all powersof an emergency board of directors pursuant to NRS 693B.030 to 693B.100, inclusive.

(Added to NRS by 1971, 1823)

NRS 693B.170 Effectof chapter on organizations power and on foreign and alien companies. Nothing in this chapter shall be construed to limit the powersof any organization, or to permit or require any organization which is not domiciledin this state, or any branch, office or agency of such organization, or thedirectors, officers, policyholders or stockholders of any such organization toact, or fail to act, in such a manner as would violate the laws of thejurisdiction wherein such organization has its domicile.

(Added to NRS by 1971, 1824)