2005 Nevada Revised Statutes - Chapter 696B — Delinquent Insurers: Conservation, Rehabilitation and Liquidation

CHAPTER 696B - DELINQUENT INSURERS:CONSERVATION, REHABILITATION AND LIQUIDATION

NRS 696B.010 Shorttitle.

NRS 696B.020 Applicabilityof chapter.

NRS 696B.030 Definitions.

NRS 696B.040 Ancillarystate defined.

NRS 696B.050 Creditordefined.

NRS 696B.060 Delinquencyproceeding defined.

NRS 696B.070 Domiciliarystate defined.

NRS 696B.080 Foreigncountry defined.

NRS 696B.090 Generalassets defined.

NRS 696B.100 Impairmentdefined.

NRS 696B.110 Insolvencydefined.

NRS 696B.120 Insurerdefined.

NRS 696B.130 Preferredclaim defined.

NRS 696B.140 Receiverdefined.

NRS 696B.150 Reciprocalstate defined.

NRS 696B.160 Securedclaim defined.

NRS 696B.170 Specialdeposit claim defined.

NRS 696B.180 Statedefined.

NRS 696B.190 Jurisdictionof delinquency proceedings; venue; exclusiveness of remedy; appeal.

NRS 696B.200 Jurisdictionover related persons and transactions; service of process.

NRS 696B.210 Groundsfor conservation or rehabilitation of domestic insurer or domiciled alieninsurer.

NRS 696B.220 Groundsfor liquidation of domestic insurer or domiciled alien insurer.

NRS 696B.230 Groundsfor conservation: Foreign and alien insurers.

NRS 696B.240 Groundsfor ancillary liquidation: Foreign and alien insurers.

NRS 696B.250 Commencementof proceeding.

NRS 696B.255 Commissioneras receiver, rehabilitator or liquidator authorized to appoint special deputiesand advisory committee.

NRS 696B.260 Serviceof process.

NRS 696B.270 Injunctions.

NRS 696B.280 UniformInsurers Liquidation Act: Composition; severability; interpretation.

NRS 696B.290 Conductof delinquency proceedings against domestic insurers and certain alieninsurers.

NRS 696B.300 Conductof delinquency proceedings against foreign insurers.

NRS 696B.310 Claimsof nonresidents against domestic insurers.

NRS 696B.320 Claimsagainst foreign insurers.

NRS 696B.330 Formof claim; notice; hearing.

NRS 696B.340 Attachmentand garnishment of assets; execution.

NRS 696B.350 Limitationson appointment of receiver; action by judgment creditor.

NRS 696B.360 Depositof money.

NRS 696B.370 Exemptionfrom fees.

NRS 696B.380 Borrowingon pledge of assets.

NRS 696B.390 Terminationof conservation or rehabilitation.

NRS 696B.400 Daterights fixed on liquidation.

NRS 696B.410 Prohibitedand voidable transfers and liens.

NRS 696B.412 Recoveryby receiver of certain distributions on capital stock and payments todirectors, officers and employees; scope of liability.

NRS 696B.415 Disbursementsto insurance guaranty associations; claims for unearned premiums.

NRS 696B.420 Orderof distribution of claims from estate of insurer on liquidation.

NRS 696B.430 Subordinationof claims for failure to cooperate.

NRS 696B.440 Offsets.

NRS 696B.450 Allowanceof certain claims.

NRS 696B.460 Timeto file claims.

NRS 696B.470 Reportand petition for assessment.

NRS 696B.480 Orderand levy of assessment.

NRS 696B.490 Assessmentprima facie correct; notice; payment; proceedings to collect.

NRS 696B.500 Summaryproceedings: Commissioners corrective orders authorized.

NRS 696B.510 Summaryproceedings: Appeal from Commissioners order.

NRS 696B.520 Summaryproceedings: Enforcement; penalty.

NRS 696B.530 Summaryproceedings: Seizure under court order.

NRS 696B.540 Summaryproceedings: Seizure under Commissioners order.

NRS 696B.550 Summaryproceedings: Conduct of administrative and judicial hearings.

NRS 696B.560 Summaryproceedings: Penalty for refusal to deliver property and records.

NRS 696B.565 Officers,agents, employees and attorneys of Division: Immunity from liability;indemnification.

NRS 696B.570 Federalreceivership.

_________

NRS 696B.010 Shorttitle. This chapter constitutes and may becited as the Insurers Conservation, Rehabilitation and Liquidation Law.

(Added to NRS by 1971, 1883)

NRS 696B.020 Applicabilityof chapter. The applicable provisions of thischapter apply to:

1. All insurers authorizedto transact insurance in this state;

2. All insurers havingpolicyholders resident in this state;

3. All insurers against whoma claim under an insurance contract may arise in this state;

4. All persons in theprocess of organization, or holding themselves out as organizing, or proposingto organize in this state for the purpose of becoming an insurer; and

5. All other persons to whomsuch provisions are otherwise expressly made applicable by law.

(Added to NRS by 1971, 1883; A 1995, 2167; 1997,1455)

NRS 696B.030 Definitions. As used in this chapter, unless the context otherwiserequires, the words and terms defined in NRS696B.040 to 696B.180, inclusive,shall have the meanings ascribed to them in NRS696B.040 to 696B.180, inclusive.

(Added to NRS by 1971, 1884)

NRS 696B.040 Ancillarystate defined. Ancillary state means anystate other than a domiciliary state.

(Added to NRS by 1971, 1884)

NRS 696B.050 Creditordefined. Creditor means a person having aclaim, whether matured or unmatured, liquidated or unliquidated, secured or unsecured,or absolute, fixed or contingent.

(Added to NRS by 1971, 1884)

NRS 696B.060 Delinquencyproceeding defined. Delinquency proceedingmeans:

1. Any proceeding commenced against an insurerpursuant to this chapter for the purpose of conserving, rehabilitating,reorganizing or liquidating the insurer; or

2. The summary proceedings authorized by NRS 696B.500 to 696B.565, inclusive.

(Added to NRS by 1971, 1884)

NRS 696B.070 Domiciliarystate defined. Domiciliary state means thestate in which an insurer is incorporated or organized or, as to an alieninsurer, the state in which at the commencement of delinquency proceedings thelarger amount of the insurers assets are held in trust or on deposit for thebenefit of policyholders and creditors in the United States of America.

(Added to NRS by 1971, 1884)

NRS 696B.080 Foreigncountry defined. Foreign country means territorynot in any state.

(Added to NRS by 1971, 1884)

NRS 696B.090 Generalassets defined.

1. General assets means all property, real, personalor otherwise, not specifically mortgaged, pledged, deposited or otherwiseencumbered for the security or benefit of specified persons or a limited classor classes of persons, and as to such specifically encumbered property the termincludes all such property or its proceeds in excess of the amount necessary todischarge the sums secured thereby.

2. Assets held in trust or on deposit for the securityor benefit of all policyholders or all policyholders and creditors in the United States of America are deemed general assets.

(Added to NRS by 1971, 1884)

NRS 696B.100 Impairmentdefined. Impairment exists as to:

1. A stock insurer when the insurers assets do not atleast equal the sum of its liabilities, including also its paid-in capitalstock account and the minimum surplus required to be maintained under this Codefor authority to transact the kinds of insurance transacted.

2. A mutual insurer when the insurers assets do notat least equal the sum of the insurers liabilities and the minimum surplusrequired under this Code to be maintained for authority to transact the kindsof insurance transacted.

(Added to NRS by 1971, 1885)

NRS 696B.110 Insolvencydefined. Insolvency exists:

1. When the insurer fails to meet its obligations asthey mature;

2. When a stock insurers assets are less than the sumof its liabilities and its paid-in capital stock account;

3. When a mutual insurers assets are less than thesum of its liabilities and the minimum basic surplus required to be maintainedby the insurer under this Code for authority to transact the kinds of insurancetransacted; or

4. As otherwise expressly provided in this Code.

(Added to NRS by 1971, 1885)

NRS 696B.120 Insurerdefined. Insurer, in addition to persons sodefined under NRS 679A.100, includesalso persons purporting to be insurers, or organizing or holding themselves outas organizing in this state for the purpose of becoming insurers.

(Added to NRS by 1971, 1885)

NRS 696B.130 Preferredclaim defined. Preferred claim means anyclaim accorded priority of payment from the insurers general assets underapplicable law.

(Added to NRS by 1971, 1885)

NRS 696B.140 Receiverdefined. Receiver means a receiver, liquidator,rehabilitator or conservator, as the context requires.

(Added to NRS by 1971, 1885)

NRS 696B.150 Reciprocalstate defined. Reciprocal state means anystate other than this state in which in substance and effect the provisions ofthe Uniform Insurers Liquidation Act, are in force, including provisionsrequiring that the commissioner of insurance or the equivalent insurancesupervisory officer be the receiver of a delinquent insurer, and in whicheffective provisions exist for avoidance of fraudulent conveyances and unlawfulpreferential transfers.

(Added to NRS by 1971, 1885)

NRS 696B.160 Securedclaim defined.

1. Secured claim means any claim secured bymortgage, trust deed, pledge, deposit as security, escrow or otherwise, but notincluding special deposit claims or claims against general assets.

2. Secured claim includes claims which have becomeliens upon specific assets through judicial process and not invalidated.

(Added to NRS by 1971, 1886)

NRS 696B.170 Specialdeposit claim defined. Special depositclaim means any claim secured by a deposit made under a statute for thesecurity or benefit of a limited class or classes of persons, but not includingany general assets.

(Added to NRS by 1971, 1886)

NRS 696B.180 Statedefined. State has the meaning ascribed toit in NRS 679A.120.

(Added to NRS by 1971, 1886)

NRS 696B.190 Jurisdictionof delinquency proceedings; venue; exclusiveness of remedy; appeal.

1. The district court hasoriginal jurisdiction of delinquency proceedings under NRS 696B.010 to 696B.565, inclusive, and any court withjurisdiction may make all necessary or proper orders to carry out the purposesof those sections.

2. The venue of delinquencyproceedings against a domestic insurer must be in the county in this state ofthe insurers principal place of business or, if the principal place ofbusiness is located in another state, in any county in this state selected by theCommissioner for the purpose. The venue of proceedings against foreign insurersmust be in any county in this state selected by the Commissioner for thepurpose.

3. At any time aftercommencement of a proceeding, the Commissioner or any other party may apply tothe court for an order changing the venue of, and removing, the proceeding toany other county of this state in which the proceeding may most conveniently,economically and efficiently be conducted.

4. No court has jurisdictionto entertain, hear or determine any petition or complaint praying for thedissolution, liquidation, rehabilitation, sequestration, conservation orreceivership of any insurer, or for an injunction or restraining order or otherrelief preliminary, incidental or relating to such proceedings, other than inaccordance with NRS 696B.010 to 696B.565, inclusive.

5. An appeal to the SupremeCourt may be taken from any court granting or refusing rehabilitation,liquidation, conservation or receivership, and from every order in delinquencyproceedings having the character of a final order as to the particular portion ofthe proceedings embraced therein.

(Added to NRS by 1971, 1886; A 1995, 1635; 1997,3037)

NRS 696B.200 Jurisdictionover related persons and transactions; service of process.

1. A court of this state in which an order ofrehabilitation or liquidation has been entered in delinquency proceedingsagainst a domestic insurer or alien insurer domiciled in this state, hasjurisdiction also over persons, served as provided in subsection 2, in anaction brought by the insurers receiver on or arising out of such obligationor relationship, as follows:

(a) Persons obligated to the insurer as a result ofagency or brokerage or transactions between such persons and the insurer;

(b) Reinsurers of the insurer and theirrepresentatives; and

(c) Past or present officers, managers, trustees,directors, organizers and promoters of the insurer, and other persons inpositions of similar responsibility with the insurer.

2. As to those of such persons who are in this state,personal service of process shall be made as in other civil actions. As tothose of such persons who cannot be found in this state at the time process isto be served, personal service of process shall be made thereon by a publicofficer of the jurisdiction in which such person may be found, in the samemanner as personal service of process is required to be made within this stateunder the Nevada Rules of Civil Procedure; and the affidavit or certificateunder oath setting forth the facts of such service shall be filed in the courtin this state in which the action is pending.

(Added to NRS by 1971, 1887)

NRS 696B.210 Groundsfor conservation or rehabilitation of domestic insurer or domiciled alieninsurer. The Commissioner may petition for anorder directing him to conserve the assets of or to rehabilitate a domesticinsurer or an alien insurer domiciled in this state on any one or more of thefollowing grounds:

1. On any ground for liquidation of the insurer under NRS 696B.220, if the Commissionerbelieves conservation or rehabilitation possible without substantial increaseof risk to creditors, policyholders or the public;

2. If the insurer is in unsound condition, or isusing, or has been subject to such methods and practices in the conduct of itsbusiness as to render its further transaction of insurance presently orprospectively hazardous to its policyholders, or creditors, or the public;

3. If the insurers solvency is endangered by illegalaction;

4. For material falsification of the insurersrecords, reports or financial condition;

5. If the Commissioner finds after hearing that anyindividual exercising executive power with respect to or otherwise materiallyinfluencing or controlling the insurer, directly or indirectly, is dishonest oruntrustworthy in matters affecting the insurer, and has not been or cannoteffectively and permanently be removed from such power, influence or control;

6. For unlawful concealment or removal by the insurerof any of its records or assets;

7. For failure of the insurer, or its parentcorporation, or subsidiary or affiliated person controlled by the insurer, tosubmit its books, accounts, records and affairs to the reasonable inspection orexamination of the Commissioner or his examiner as authorized under this Code;

8. If any individual exercising any executiveauthority in the affairs of the insurer, or parent corporation, or subsidiaryor affiliated person has refused to be examined under oath, by the Commissioneror his examiner thereunto duly authorized, whether within this state orotherwise, concerning the pertinent affairs of the insurer, or parentcorporation, or subsidiary, or affiliated person, or if examined under oathrefuses to divulge pertinent information reasonably known to him;

9. For failure of officers, employees and otherrepresentatives of the insurer, or parent corporation, or subsidiary, oraffiliated person to comply promptly with the reasonable requests of theCommissioner or his examiner for the purposes of and during the conduct of anyexamination;

10. That a deadlock exists in the insurers board ofdirectors relative to the general management of the insurers affairs, that theinsurers stockholders or members (as to a mutual insurer) are unable to breakthe deadlock, and that the same threatens irreparable injury to the insurer, orits creditors, or its policyholders, or to the public;

11. If the insurer has transferred or attempted totransfer substantially its entire property or business, or has entered into anytransaction the effect of which is to merge or consolidate substantially itsentire property or business in that of any other insurer, without first havingobtained the written approval of the Commissioner as required under this Code;

12. If the controlling stock of the insurer has beentransferred to others without compliance with the requirements of NRS 693A.320 (transfer of controllingstock), except where such transfer is by testamentary bequest or inheritance;

13. If the insurer has willfully violated its charteror a law of this state, or has willfully exceeded its corporate powers;

14. If the insurer has requested or consented toconservation or rehabilitation by a vote or written authorization of a majorityof its directors, or stockholders, or members (as to mutual insurers); or

15. If the insurer has failed to pay any validjudgment against it within 30 days after the judgment became final.

(Added to NRS by 1971, 1887)

NRS 696B.220 Groundsfor liquidation of domestic insurer or domiciled alien insurer. The Commissioner may apply to the court for an orderappointing him as receiver (if his appointment as receiver is not then ineffect) and directing him to liquidate the business of a domestic insurer or ofthe United States branch of an alien insurer having trusteed assets in thisstate, whether or not there has been a prior order directing him to conserve orrehabilitate the insurer, upon any one or more of the following grounds:

1. That the insurer has failed to cure an impairmentof surplus, or capital, or assets within the time allowed therefor by anylawful order of the Commissioner;

2. That the insurer is insolvent, or has commencedvoluntary liquidation or dissolution, or attempts to commence or prosecute oris the object, in this state or elsewhere, of any action or proceeding toliquidate its business or affairs, or to dissolve its corporate charter, or toprocure the appointment of a receiver, trustee, custodian or sequestrator underany law except this Code. This subsection does not apply to the conversion of astock insurer to an ordinary business corporation as authorized under NRS 693A.300, or to voluntary dissolutionof the insurer pursuant to NRS 692B.250;

3. That the insurer has ceased for a period of 1 yearto transact insurance business;

4. If a proposed insurer has not completed itsorganization and obtained a certificate of authority as an insurer within thetime allowed therefor under any applicable solicitation permit issued by theCommissioner;

5. That efforts to rehabilitate the insurer and removethe causes or adverse effects thereof for which rehabilitation was institutedhave failed despite all reasonable efforts by the Commissioner, or cannot becontinued without material increase of risk of loss to the insurers creditorsor policyholders; or

6. If the insurer has requested or consented toliquidation by a vote or written authorization of a majority of its directors,or stockholders, or members (if a mutual insurer).

(Added to NRS by 1971, 1888)

NRS 696B.230 Groundsfor conservation: Foreign and alien insurers. TheCommissioner may apply to the court for an order appointing him as receiver orancillary receiver, and directing him to conserve the assets within this state,of a foreign or alien insurer:

1. Upon any of the applicable grounds specified in NRS 696B.210 or 696B.220;

2. Upon the ground that the insurers property hasbeen sequestrated in its domiciliary sovereignty or in any other sovereignty;or

3. In the case of an alien insurer, upon the groundthat the insurer has failed to make good an impairment of its trusteed fundswithin the time required therefor by order of the Commissioner.

(Added to NRS by 1971, 1889)

NRS 696B.240 Groundsfor ancillary liquidation: Foreign and alien insurers.The Commissioner may apply to the court for an order appointing him asancillary receiver of and directing him to liquidate the business of a foreignor alien insurer having assets, business or claims in this state upon theappointment in the domiciliary sovereignty of such insurer of a receiver,liquidator, conservator, rehabilitator or other officer by whatever name calledfor the purpose of liquidating the business of the insurer.

(Added to NRS by 1971, 1889)

NRS 696B.250 Commencementof proceeding.

1. The Commissioner shall commence a delinquencyproceeding authorized under this chapter, the Attorney General representinghim, by filing a petition in a court of proper jurisdiction praying forappointment of the Commissioner as receiver of the insurer.

2. Upon the filing of the petition the court shallissue an order directing the insurer to appear in court on the day fixed in theorder and show cause why the petition should not be granted. Unless good causeis shown for a shorter period, the order shall require the insurer so to showcause not less than 15 days nor more than 30 days from the date of the order.

3. The order to show cause and service thereof on theinsurer shall constitute due and legal process and shall be in lieu of anyother process otherwise provided by law or court rule.

(Added to NRS by 1971, 1890)

NRS 696B.255 Commissioneras receiver, rehabilitator or liquidator authorized to appoint special deputiesand advisory committee.

1. The Commissioner, as receiver, rehabilitator orliquidator, may appoint one or more special deputies who have all the powersand responsibilities of a receiver, rehabilitator or liquidator, and theCommissioner may employ such counsels, clerks and assistants as he considersnecessary. The compensation of such special deputies, counsels, clerks andassistants and all expenses of taking possession of the insurer and ofconducting the proceedings must be fixed by the Commissioner with the approvalof the court, and paid out of the money or other assets of the insurer. The personsappointed pursuant to this section serve at the pleasure of the Commissioner.The Commissioner, as receiver, rehabilitator or liquidator, may, with theapproval of the court, appoint an advisory committee of policyholders,claimants or other creditors, including guaranty associations, if he considerssuch a committee necessary. The committee serves at the pleasure of theCommissioner and serves without compensation other than reimbursement forreasonable travel and other expenses. No other committee of any nature may beappointed by the Commissioner or the court in proceedings for receivership,rehabilitation or liquidation conducted pursuant to this chapter.

2. If the property of the insurer does not containsufficient cash or liquid assets to defray the costs incurred, the Commissionermay advance the costs so incurred out of any appropriation for the maintenanceof the Division. Any amounts so advanced for expenses of administration must berepaid to the Commissioner out of the first available money of the insurer.

(Added to NRS by 1995, 1634)

NRS 696B.260 Serviceof process. A certified copy of any order toshow cause issued under NRS 696B.250,and a copy of the petition upon which the order is made shall be served uponthe insurer by delivering the same to its president, vice president, secretary,treasurer, director, resident agent for service of process, or to its managingagent, or attorney-in-fact (if a reciprocal insurer). If no such officer orfunctionary can readily be found in this state, then such process may be servedupon the insurer by service thereof upon the Commissioner pursuant to NRS 680A.250 and 680A.260, and in which case theadditional 10 days provided by subsection 3 of NRS 680A.260 shall not apply.

(Added to NRS by 1971, 1890)

NRS 696B.270 Injunctions.

1. Upon application by the Commissioner for such anorder to show cause, or at any time thereafter, the court may without noticeissue an injunction restraining the insurer, its officers, directors,stockholders, members, subscribers, agents and all other persons from thetransaction of its business or the waste or disposition of its property untilthe further order of the court, but the court shall so frame its injunction asnot to prevent the Nevada Life and Health Insurance Guaranty Association andthe Nevada Insurance Guaranty Association from exercising their respectivepowers under this title.

2. The court may at any time during a proceeding underNRS 696B.010 to 696B.565, inclusive, issue such otherinjunctions or orders as may be deemed necessary to prevent interference withthe Commissioner or the proceeding, or waste of the assets of the insurer, orthe commencement or prosecution of any actions, or the obtaining ofpreferences, judgments, attachments or other liens, or the making of any levyagainst the insurer or against its assets or any part thereof.

3. No bond may be required of the Commissioner as aprerequisite for the issuance of any injunction or restraining order pursuantto this section.

(Added to NRS by 1971, 1890; A 1991, 883)

NRS 696B.280 UniformInsurers Liquidation Act: Composition; severability; interpretation.

1. This section, NRS696B.030 to 696B.180, inclusive,(definitions) and NRS 696B.290 to 696B.340, inclusive, comprise and may becited as the Uniform Insurers Liquidation Act.

2. If any provision of the Uniform InsurersLiquidation Act or the application thereof to any person or circumstances isheld invalid, such invalidity shall not affect other provisions or applicationsof the act which can be given effect without the invalid provision orapplication, and to this end the provisions of the act are declared to beseverable.

3. The Uniform Insurers Liquidation Act shall be sointerpreted as to effectuate its general purpose to make uniform the laws ofthose states which enact it. To the extent that its provisions, whenapplicable, conflict with other provisions of this Code, the provisions of theUniform Insurers Liquidation Act shall control.

(Added to NRS by 1971, 1891)

NRS 696B.290 Conductof delinquency proceedings against domestic insurers and certain alieninsurers.

1. Whenever under this chapter a receiver is to be appointedin delinquency proceedings for an insurer, the court shall appoint thecommissioner as such receiver. The court shall order the commissioner forthwithto take possession of the assets of the insurer and to administer the assetsunder the orders of the court.

2. As a domiciliary receiver, the commissioner shallbe vested by operation of law with the title to all of the property, contractsand rights of action, and all of the books and records of the insurer, whereverlocated, as of the date of entry of the order directing him to conserve,rehabilitate or liquidate a domestic insurer or to liquidate the United Statesbranch of an alien insurer domiciled in this state, and he shall have the rightto recover the same and reduce the same to possession; but ancillary receiversin reciprocal states shall have, as to assets located in their respectivestates, the rights and powers which are prescribed in this chapter forancillary receivers appointed in this state as to assets located in this state.

3. The filing or recording of the order directingpossession to be taken, or a certified copy thereof, in any office whereinstruments affecting title to property are required to be filed or recordedshall impart the same notice as would be imparted by a deed, bill of sale orother evidence of title duly filed or recorded.

4. The Commissioner as domiciliary receiver shall beresponsible for the proper administration of all assets coming into hispossession or control. The court may at any time require a bond from him or hisdeputies if deemed desirable for the protection of such assets.

5. Upon taking possession of the assets of an insurer,the domiciliary receiver shall immediately proceed to conduct the business ofthe insurer or to take such steps as are authorized by this chapter for thepurpose of rehabilitating, liquidating or conserving the affairs or assets ofthe insurer.

6. In connection with delinquency proceedings, theCommissioner may appoint one or more special deputy commissioners to act forhim and he may employ such counsel, clerks and assistants as he deemsnecessary. The compensation of the special deputies, counsel, clerks orassistants and all expenses of taking possession of the insurer and ofconducting the proceedings shall be fixed by the receiver and shall be paid outof the funds or assets of the insurer. Within the limits of duties imposed uponthem, special deputies shall possess all the powers given to and, in theexercise of those powers, shall be subject to all of the duties imposed uponthe receiver with respect to such proceedings.

7. During such receivership the Commissioner shallfile in the court, at regular intervals not less frequently than quarterly, histrue reports in summary form of the insurers affairs under the receivership,and of progress being made in accomplishing the objectives of the receivership.All such reports, together with such additional or special reports as the courtmay reasonably require, shall be subject to review by the court; and all actionsof the receiver therein reported shall be subject to the courts approval, butthe court shall not withhold approval or disapprove any such action unlessfound by the court after a hearing thereon in open court to be unlawful, arbitraryor capricious.

(Added to NRS by 1971, 1891)

NRS 696B.300 Conductof delinquency proceedings against foreign insurers.

1. Whenever under this chapter an ancillary receiveris to be appointed in delinquency proceedings for an insurer not domiciled inthis State, the court shall appoint the Commissioner as ancillary receiver. TheCommissioner shall file a petition requesting the appointment on the groundsset forth in NRS 696B.230 or 696B.240:

(a) If he finds that there are sufficient assets of theinsurer located in this State to justify the appointment of an ancillaryreceiver; or

(b) If 10 or more persons resident in this State havingclaims against such insurer file a petition with the Commissioner requestingthe appointment of such ancillary receiver.

2. The domiciliary receiver for the purpose ofliquidating an insurer domiciled in a reciprocal state shall be vested byoperation of law with the title to all of the property, contracts and rights ofaction, and all of the books and records of the insurer located in this State,and he shall have the immediate right to recover balances due from local agentsand to obtain possession of any books and records of the insurer found in thisState. He shall also be entitled to recover the other assets of the insurerlocated in this State, except that upon the appointment of an ancillary receiverin this State, the ancillary receiver shall during the ancillary receivershipproceedings have the sole right to recover such other assets. The ancillaryreceiver shall, as soon as practicable, liquidate from their respectivesecurities those special deposit claims and secured claims which are proved andallowed in the ancillary proceedings in this State, and shall pay the necessaryexpenses of the proceedings. All remaining assets he shall promptly transfer tothe domiciliary receiver. Subject to the provisions of this section, theancillary receiver and his deputies shall have the same powers and be subjectto the same duties with respect to the administration of such assets as areceiver of an insurer domiciled in this State.

3. The domiciliary receiver of an insurer domiciled ina reciprocal state may sue in this State to recover any assets of such insurerto which he may be entitled under the laws of this State.

(Added to NRS by 1971, 1892)

NRS 696B.310 Claimsof nonresidents against domestic insurers.

1. In a delinquency proceeding begun in this stateagainst a domestic insurer, claimants residing in reciprocal states may fileclaims either with the ancillary receivers, if any, in their respective states,or with the domiciliary receiver. All such claims must be filed on or beforethe last date fixed for the filing of claims in the domiciliary delinquencyproceedings.

2. Controverted claims belonging to claimants residingin reciprocal states may either:

(a) Be proved in this state; or

(b) If ancillary proceedings have been commenced insuch reciprocal states, be proved in those proceedings. If a claimant elects toprove his claim in ancillary proceedings and if notice of the claim andopportunity to appear and be heard is afforded the domiciliary receiver of thisstate, as provided in NRS 696B.320with respect to ancillary proceedings in this state, the final allowance ofsuch claim by the courts in the ancillary state shall be accepted in this stateas conclusive as to its amount and shall also be accepted as conclusive as toits priority, if any, against special deposits or other security located withinthe ancillary state.

(Added to NRS by 1971, 1893)

NRS 696B.320 Claimsagainst foreign insurers.

1. In a delinquency proceeding in a reciprocal stateagainst an insurer domiciled in that state, claimants against such insurer whoreside within this state may file claims either with the ancillary receiver, ifany, appointed in this state, or with the domiciliary receiver. All such claimsmust be filed on or before the last date fixed for the filing of claims in thedomiciliary delinquency proceedings.

2. Controverted claims belonging to claimants residingin this state may either:

(a) Be proved in the domiciliary state as provided bythe law of that state; or

(b) If ancillary proceedings have been commenced inthis state, be proved in those proceedings. If any such claimant elects toprove his claim in this state, he shall file his claim with the ancillaryreceiver and shall give notice in writing to the receiver in the domiciliarystate, either by registered or certified mail or by personal service at least40 days prior to the date set for hearing. The notice shall contain a concisestatement of the amount of the claim, the facts on which the claim is based,and the priorities asserted, if any. If the domiciliary receiver within 30 daysafter the giving of such notice gives notice in writing to the ancillaryreceiver and to the claimant, either by registered or certified mail or bypersonal service, of his intention to contest such claim, he shall be entitledto appear or to be represented in any proceeding in this state involvingadjudication of the claim. The final allowance of the claim by the courts ofthis state shall be accepted as conclusive as to its amount and shall also beaccepted as conclusive as to its priority, if any, against special deposits orother security located within this state.

(Added to NRS by 1971, 1893)

NRS 696B.330 Formof claim; notice; hearing.

1. All claims against an insurer against whichdelinquency proceedings have been begun shall set forth in reasonable detailthe amount of the claim, or the basis upon which such amount can beascertained, the facts upon which the claim is based, and the prioritiesasserted, if any. All such claims shall be verified by the affidavit of theclaimant, or someone authorized to act on his behalf and having knowledge ofthe facts, and shall be supported by such documents as may be material thereto.

2. All claims filed in this state shall be filed withthe receiver, whether domiciliary or ancillary, in this state, on or before thelast date for filing as specified in this chapter.

3. Within 10 days of the receipt of any claim, orwithin such further period as the court may fix for good cause shown, thereceiver shall report the claim to the court, specifying in such report hisrecommendation with respect to the action to be taken thereon. Upon receipt ofsuch report, the court shall fix a time for hearing the claim and shall directthat the claimant or the receiver, as the court shall specify, shall give suchnotice as the court determines to such persons as appear to the court to beinterested therein. All such notices shall specify the time and place of thehearing and shall concisely state the amount and nature of the claim, thepriorities asserted, if any, and the recommendation of the receiver withreference thereto.

4. At the hearing, all persons interested shall beentitled to appear, and the court shall enter an order allowing, allowing inpart, or disallowing the claim. Any such order is an appealable order.

(Added to NRS by 1971, 1894)

NRS 696B.340 Attachmentand garnishment of assets; execution. Duringthe pendency of delinquency proceedings in this or any reciprocal state, noaction or proceeding in the nature of an attachment, garnishment or executionshall be commenced or maintained in the courts of this state against thedelinquent insurer or its assets. Any lien obtained by any such action orproceeding within 4 months prior to the commencement of any such delinquencyproceedings or at any time thereafter is void as against any rights arising insuch delinquency proceedings.

(Added to NRS by 1971, 1894)

NRS 696B.350 Limitationson appointment of receiver; action by judgment creditor.

1. Except as provided in subsection 2, no order,judgment or decree enjoining, restraining or interfering with the prosecutionof the business of any insurer or for the appointment of a temporary orpermanent receiver of a domestic insurer shall be made or granted otherwisethan upon the petition of the Commissioner represented by the Attorney Generalas provided in this chapter.

2. A judgment creditor may commence an action for theenforcement and protection of his judgment or institute proceedingssupplementary to execution against any such debtor insurer, giving 30 daysnotice to the Commissioner of his intention so to do, and in any such action orproceeding the court may, subject to NRS696B.340, appoint a receiver for the purposes thereof as the court may deemnecessary.

(Added to NRS by 1971, 1895)

NRS 696B.360 Depositof money.

1. Except as otherwise provided in this section:

(a) The money collected by the Commissioner in aproceeding under this chapter must be from time to time deposited in one ormore state or national banks, savings banks, credit unions or trust companies,and in the case of the insolvency or voluntary or involuntary liquidation ofany such depositary which is an institution organized and supervised under thelaws of this state, such deposits are entitled to priority of payment on anequality with any other priority given by the banking laws of this state.

(b) The Commissioner may deposit the money or any partthereof in a national bank, credit union or trust company as a trust fund.

2. The Commissioner shall deposit in the StateInsurance Fund any money collected in a proceeding under this chapter that isrequired to be held in trust by a successor organization of the StateIndustrial Insurance System by NRS616B.042. The money must be used by the Commissioner for the payment ofclaims made against the successor organization under a policy of industrialinsurance issued by that organization, and any administration costs andexpenses related thereto. The payment of the claims must be made in accordancewith the provisions of this chapter.

(Added to NRS by 1971, 1895; A 1999, 1555, 1834)

NRS 696B.370 Exemptionfrom fees. The Commissioner shall not be requiredto pay any fee to any public officer in this state for service of process, orfor filing, recording, issuing a transcript or certificate or authenticatingany paper or instrument pertaining to the exercise by the Commissioner of anyof the powers or duties conferred upon him under this chapter, whether or notsuch paper or instrument is executed by the Commissioner or his deputies,employees or attorneys of record and whether or not it is connected with thecommencement of any action or proceeding by or against the Commissioner, orwith the subsequent conduct of such action or proceeding.

(Added to NRS by 1971, 1895)

NRS 696B.380 Borrowingon pledge of assets.

1. For the purpose of facilitating the rehabilitation,liquidation, conservation or dissolution of an insurer pursuant to NRS 696B.010 to 696B.565, inclusive, the Commissionermay, subject to the approval of the court, borrow money and execute,acknowledge and deliver notes or other evidences of indebtedness therefor and securethe repayment of the same by the mortgage, pledge, assignment, transfer intrust or hypothecation of any or all of the property, whether real, personal ormixed, of such insurer, and the Commissioner, subject to the approval of thecourt, shall have power to take any and all other action necessary and properto consummate any such loan and to provide for the repayment thereof.

2. The Commissioner shall be under no obligationpersonally or in his official capacity to repay any loan made pursuant to thissection.

(Added to NRS by 1971, 1895)

NRS 696B.390 Terminationof conservation or rehabilitation. If at anytime the court finds, after a hearing in open court, upon petition of theCommissioner or of the insurer or of its own motion, that the objectives of anorder to conserve or rehabilitate a domestic insurer or an alien insurerdomiciled in this state have been accomplished, and that the insurer can bereturned to its own management without further jeopardy to the insurer and itscreditors or policyholders or stockholders or to the public, the court may,upon a full report and accounting by the Commissioner relative to the conductof the insurers affairs during the conservation or rehabilitation and of theinsurers current financial condition, terminate the conservation orrehabilitation and by order return the insurer, its assets and affairs, to theinsurers management.

(Added to NRS by 1971, 1896)

NRS 696B.400 Daterights fixed on liquidation. The rights andliabilities of the insurer and of its creditors, policyholders, stockholders,members, subscribers and all other persons interested in its estate shall,unless otherwise directed by the court, be fixed as of the date on which theorder directing the liquidation of the insurer is filed in the office of theclerk of the court which made the order, subject to the provisions of thischapter with respect to the rights of claimants holding contingent claims.

(Added to NRS by 1971, 1896)

NRS 696B.410 Prohibitedand voidable transfers and liens.

1. No insurer shall make any transfer of or create anylien upon any of its property with the intent of giving to or enabling anycreditor or policyholder to obtain a greater percentage of his debt than anyother creditor or policyholder of the same class.

2. Any transfer of, or lien upon, any property of anyinsurer made or created within 4 months prior to the filing of a petition foran order to show cause under this chapter, which gives to any creditor orpolicyholder or enables him to obtain a greater percentage of his debt than anyother creditor or policyholder in the same class, and which is accepted by acreditor or policyholder having reasonable cause to believe that such apreference will occur, is voidable. Where the preference consists of atransfer, such period of 4 months shall not expire until 4 months after thedate of the recording or registering of the transfer if by law such recordingor registering is required.

3. Every director, officer, employee, stockholder,member or any other person acting on behalf of such insurer, who, within 2years prior to the filing of a petition for an order to show cause against suchinsurer under this chapter, knowingly participates in the making of anytransfer or the creation of any lien prohibited by subsection 1, and everyperson receiving any property of, or cash surrender from, such insurer or thebenefit thereof as a result of a transaction voidable under subsection 2, shallbe jointly and severally liable therefor and shall be bound to account to theCommissioner as receiver, rehabilitator, liquidator or conservator, as the casemay be.

4. The Commissioner as receiver, rehabilitator,liquidator or conservator may avoid any transfer of or lien upon the propertyof an insurer which any creditor, stockholder or member of such insurer mighthave avoided and may recover the property so transferred or its value from theperson to whom it was transferred unless he was a bona fide holder for valueprior to the date of the entry of an order to show cause under this chapter.Such property may be recovered or its value collected from whoever may have receivedit except a bona fide holder for value.

(Added to NRS by 1971, 1896)

NRS 696B.412 Recoveryby receiver of certain distributions on capital stock and payments todirectors, officers and employees; scope of liability.

1. Except as otherwise provided in subsections 2 and4, if an order for liquidation or rehabilitation of a domestic insurer has beenissued, the receiver appointed under the order may recover on behalf of theinsurer:

(a) From any parent corporation, holding company,affiliate or person who otherwise controlled the insurer, the amount of anydistribution, other than a distribution of shares of the same class of stock,made by the insurer on its capital stock; and

(b) Any payment in the form of a bonus, settlement ontermination, or extraordinary adjustment of salary in a lump sum made by theinsurer or a subsidiary to a director, officer or employee,

made duringthe year preceding the petition for liquidation, conservation or rehabilitation.

2. A distribution is not recoverable if the parentcorporation, holding company or affiliate shows that when made the distributionwas lawful and reasonable and that the insurer did not know and could notreasonably have known that the distribution might adversely affect the abilityof the insurer to fulfill its contractual obligations.

3. A parent corporation, holding company or person whootherwise controlled the insurer or affiliate at the time the distribution orpayment was made is liable up to the amount of the distribution or paymentwhich he received. A person who otherwise controlled the insurer at the time adistribution was declared is liable up to the amount that would have beenreceived if the distribution had been made immediately. If two or more personsare liable with respect to the same distribution, they are jointly andseverally liable.

4. The greatest amount recoverable under this sectionis the amount needed in excess of all other available assets of the impaired orinsolvent insurer to pay its contractual obligations and reimburse any guarantyfund.

5. To the extent that a person liable under subsection3 is insolvent or otherwise fails to pay a claim due from it, a parentcorporation, holding company or person who otherwise controlled it at the timethe distribution was made is jointly and severally liable for any resultingdeficiency in the amount recovered from the person so liable.

(Added to NRS by 2001, 2251)

NRS 696B.415 Disbursementsto insurance guaranty associations; claims for unearned premiums.

1. Upon the issuance of an order of liquidation with afinding of insolvency against a domestic insurer, the Commissioner shall applyto the district court for authority to disburse money to the Nevada InsuranceGuaranty Association or the Nevada Life and Health Insurance GuarantyAssociation out of the marshaled assets of the insurer, as money becomesavailable, in amounts equal to disbursements made or to be made by theAssociation for claims-handling expense and covered-claims obligations upon thepresentation of evidence that disbursements have been made by the Association.The Commissioner shall apply to the district court for authority to makesimilar disbursements to insurance guaranty associations in other jurisdictionsif one of the Nevada Associations is entitled to like payment pursuant to thelaws relating to insolvent insurers in the jurisdiction in which theorganization is domiciled.

2. The Commissioner, in determining the amountsavailable for disbursement to the Nevada Insurance Guaranty Association, theNevada Life and Health Insurance Guaranty Association and similar organizationsin other jurisdictions, shall reserve sufficient assets for the payment of theexpenses of administration.

3. The Commissioner shall establish procedures for theratable allocation of disbursements to the Nevada Insurance GuarantyAssociation, the Nevada Life and Health Insurance Guaranty Association andsimilar organizations in other jurisdictions, and shall secure from eachorganization to which money is paid as a condition to advances in reimbursementof covered-claims obligations an agreement to return to the Commissioner, ondemand, amounts previously advanced which are required to pay claims of securedcreditors and claims falling within the priorities established in paragraph (a)or (b) of subsection 1 of NRS 696B.420.

4. The Commissioner, as receiver for an insolventinsurer, may file a claim on behalf of all insureds for any unearned premiums.The Nevada Insurance Guaranty Association, the Nevada Life and Health InsuranceGuaranty Association and similar organizations in other jurisdictions shallaccept the claim in lieu of requiring each insured to file a claim for theunearned premium.

(Added to NRS by 1977, 439; A 1997, 3037; 1999, 2524; 2003, 3333)

NRS 696B.420 Orderof distribution of claims from estate of insurer on liquidation.

1. The order of distribution of claims from the estateof the insurer on liquidation of the insurer must be as set forth in thissection. Each claim in each class must be paid in full or adequate moneyretained for the payment before the members of the next class receive anypayment. No subclasses may be established within any class. Except as otherwiseprovided in subsection 2, the order of distribution and of priority must be asfollows:

(a) Administration costs and expenses, including, butnot limited to, the following:

(1) The actual and necessary costs of preservingor recovering the assets of the insurer;

(2) Compensation for any services rendered inthe liquidation;

(3) Any necessary filing fees;

(4) The fees and mileage payable to witnesses;and

(5) Reasonable attorneys fees.

(b) All claims under policies, any claims against aninsured for liability for bodily injury or for injury to or destruction oftangible property which are covered claims under policies, including any suchclaims of the Federal Government or any state or local government, and anyclaims of the Nevada Insurance Guaranty Association, the Nevada Life and HealthInsurance Guaranty Association and other similar statutory organizations inother jurisdictions. Any claims under life insurance and annuity policies,whether for death proceeds, annuity proceeds or investment values, must betreated as loss claims. That portion of any loss for which indemnification isprovided by other benefits or advantages recovered or recoverable by theclaimant may not be included in this class, other than benefits or advantagesrecovered or recoverable in discharge of familial obligations of support orbecause of succession at death or as proceeds of life insurance, or asgratuities. No payment made by an employer to his employee may be treated as agratuity.

(c) Unearned premiums and small loss claims, includingclaims under nonassessable policies for unearned premiums or other premiumrefunds.

(d) Except as otherwise provided in paragraph (b),claims of the Federal Government.

(e) Except as otherwise provided in paragraph (b),claims of any state or local government, including, but not limited to, a claimof a state or local government for a penalty or forfeiture.

(f) Wage debts due employees for services performed,not to exceed an amount equal to 2 months of monetary compensation for eachemployee for services performed within 6 months before the filing of thepetition for liquidation or, if rehabilitation preceded liquidation, within 1year before the filing of the petition for rehabilitation. Officers of theinsurer are not entitled to the benefit of this priority. The priority setforth in this paragraph must be in lieu of any other similar priorityauthorized by law as to wages or compensation of employees.

(g) Residual classification, including any other claimsnot falling within other classes pursuant to the provisions of this section.Claims for a penalty or forfeiture must be allowed in this class only to theextent of the pecuniary loss sustained from the act, transaction or proceedingout of which the penalty or forfeiture arose, with reasonable and actual costsoccasioned thereby. The remainder of the claims must be postponed to the classof claims specified in paragraph (j).

(h) Judgment claims based solely on judgments. If aclaimant files a claim and bases the claim on the judgment and on theunderlying facts, the claim must be considered by the liquidator, who shallgive the judgment such weight as he deems appropriate. The claim as allowedmust receive the priority it would receive in the absence of the judgment. Ifthe judgment is larger than the allowance on the underlying claim, theremaining portion of the judgment must be treated as if it were a claim basedsolely on a judgment.

(i) Interest on claims already paid, which must becalculated at the legal rate compounded annually on any claims in the classesspecified in paragraphs (a) to (h), inclusive, from the date of the petitionfor liquidation or the date on which the claim becomes due, whichever is later,until the date on which the dividend is declared. The liquidator, with theapproval of the court, may:

(1) Make reasonable classifications of claimsfor purposes of computing interest;

(2) Make approximate computations; and

(3) Ignore certain classifications and periodsas de minimis.

(j) Miscellaneous subordinated claims, with interest asprovided in paragraph (i):

(1) Claims subordinated by NRS 696B.430;

(2) Claims filed late;

(3) Portions of claims subordinated pursuant tothe provisions of paragraph (g);

(4) Claims or portions of claims the payment ofwhich is provided by other benefits or advantages recovered or recoverable bythe claimant; and

(5) Claims not otherwise provided for in thissection.

(k) Preferred ownership claims, including surplus orcontribution notes, or similar obligations, and premium refunds on assessablepolicies. Interest at the legal rate must be added to each claim, as providedin paragraphs (i) and (j).

(l) Proprietary claims of shareholders or other owners.

2. If there are no existing or potential claims of thegovernment against the estate, claims for wages have priority over any claimsset forth in paragraphs (c) to (k), inclusive, of subsection 1. The provisionsof this subsection must not be construed to require the accumulation ofinterest for claims as described in paragraph (i) of subsection 1.

(Added to NRS by 1971, 1897; A 1977, 440; 1997, 3038;1999, 2524; 2003, 3334)

NRS 696B.430 Subordinationof claims for failure to cooperate. If anancillary receiver in another state or foreign country, by whatever namecalled, fails to transfer to the domiciliary liquidator in this state anyassets within his control other than special deposits, diminished only by theexpenses, if any, of the ancillary receivership, claims filed in the ancillaryreceivership, other than special deposit claims or secured claims, must beplaced in the class of claims specified in paragraph (j) of subsection 1 of NRS 696B.420.

(Added to NRS by 1971, 1899; A 1997, 3040; 1999, 2526)

NRS 696B.440 Offsets.

1. Except as provided in subsection 2, in all cases ofmutual debts or mutual credits between the insurer and another person inconnection with any action or proceeding under this chapter, such credits anddebts shall be setoff and the balance only shall be allowed or paid.

2. No offset shall be allowed in favor of any suchperson where:

(a) The obligation of the insurer to such person wouldnot at the date of the entry of any liquidation order or otherwise, as providedin NRS 696B.400, entitle him to shareas a claimant in the assets of the insurer;

(b) The obligation of the insurer to such person waspurchased by or transferred to such person with a view of its being used as anoffset; or

(c) The obligation of such person is to pay anassessment levied against the members of a mutual insurer, or against thesubscribers of a reciprocal insurer, or is to pay a balance upon thesubscription to the capital stock of a stock insurer.

(Added to NRS by 1971, 1899)

NRS 696B.450 Allowanceof certain claims.

1. No contingent and unliquidated claim shall share ina distribution of the assets of an insurer which has been adjudicated to beinsolvent by an order made pursuant to this chapter, except that such claimshall be considered, if properly presented, and may be allowed to share where:

(a) Such claim becomes absolute against the insurer on orbefore the last day for filing claims against the assets of such insurer; or

(b) There is a surplus and the liquidation isthereafter conducted upon the basis that such insurer is solvent.

2. Where an insurer has been so adjudicated to beinsolvent any person who has a cause of action against an insured of suchinsurer under a liability insurance policy issued by such insurer shall havethe right to file a claim in the liquidation proceeding, regardless of the factthat such claim may be contingent, and such claim may be allowed:

(a) If it may be reasonably inferred from the proofpresented upon such claim that such person would be able to obtain a judgmentupon such cause of action against such insured;

(b) If such person furnishes suitable proof, unless thecourt for good cause shown otherwise directs, that no further valid claimagainst such insurer arising out of his cause of action other than thosealready presented can be made; and

(c) If the total liability of such insurer to allclaimants arising out of the same act of its insured is no greater than itsmaximum liability would be were it not in liquidation.

3. No judgment against such an insured taken after thedate of entry of the liquidation order shall be considered in the liquidationproceedings as evidence of liability, or of the amount of damages, and nojudgment against an insured taken by default, or by collusion prior to theentry of the liquidation order shall be considered as conclusive evidence inthe liquidation proceedings, either of the liability of such insured to suchperson upon such cause of action or of the amount of damages to which suchperson is therein entitled.

4. No claim of any secured claimant shall be allowedat a sum greater than the difference between the value of the claim withoutsecurity and the value of the security itself as of the date of the entry ofthe order of liquidation or such other date set by the court for determiningrights and liabilities as provided in NRS696B.400 unless the claimant surrenders his security to the Commissioner,in which event the claim shall be allowed in the full amount for which it isvalued.

(Added to NRS by 1971, 1899)

NRS 696B.460 Timeto file claims.

1. If upon the entry of an order of liquidation underthis chapter or at any time thereafter during liquidation proceedings theinsurer is not clearly solvent, the court shall, upon a hearing after suchnotice as it deems proper, make and enter an order adjudging the insurer to beinsolvent.

2. After the entry of the order of insolvency,regardless of any prior notice that may have been given to creditors, theCommissioner shall notify all persons who may have claims against the insurerto file such claims with him, at a place and within the time specified in thenotice, or that such claims shall be forever barred. The time specified in thenotice shall be as fixed by the court for filing of claims, which shall be notless than 6 months after the entry of the order of insolvency. The notice shallbe given in such manner and for such reasonable period of time as may beordered by the court.

(Added to NRS by 1971, 1900)

NRS 696B.470 Reportand petition for assessment. Within 3 yearsafter the date of the entry of an order of rehabilitation or liquidation of adomestic mutual insurer or a domestic reciprocal insurer, the Commissioner maymake and file his report and petition to the court setting forth:

1. The reasonable value of the assets of the insurer;

2. The liabilities of the insurer to the extent thusfar ascertained by the Commissioner;

3. The aggregate amount of the assessment, if any,which the Commissioner deems reasonably necessary to pay all claims, the costsand expenses of the collection of the assessments and the costs and expenses ofthe delinquency proceedings in full; and

4. Any other information relative to the affairs orproperty of the insurer that the Commissioner deems material.

(Added to NRS by 1971, 1900)

NRS 696B.480 Orderand levy of assessment.

1. Upon the filing and reading of the report andpetition provided for in NRS 696B.470,the court, ex parte, may order the Commissioner to assess all members orsubscribers of the insurer who may be subject to such an assessment, in such anaggregate amount as the court finds reasonably necessary to pay all such validclaims as may be timely filed and proved in the delinquency proceedings,together with the costs and expenses of levying and collecting assessments andthe costs and expenses of the delinquency proceedings in full. Any such ordershall require the Commissioner to assess each such member or subscriber for hisproportion of the aggregate assessment, according to such reasonableclassification of such members or subscribers and formula as may be made by theCommissioner and approved by the court.

2. The court may order additional assessments upon thefiling and reading of any amendment or supplement to the report and petitionreferred to in subsection 1, if such amendment or supplement is filed within 3years after the date of the entry of the order of rehabilitation orliquidation.

3. After the entry of the order to levy and assessmembers or subscribers of an insurer referred to in subsection 1 or 2, theCommissioner shall levy and assess members or subscribers in accordance withthe order.

4. The total of all assessments against any member orsubscriber with respect to any policy, whether levied pursuant to this chapteror pursuant to any other provision of this Code, shall be for no greater amountthan that specified in the policy or policies of the member or subscriber andas limited under this Code, except as to any policy which was issued at a rateof premium below the minimum rate lawfully permitted for the risk insured, inwhich event the assessment against any such policyholder shall be upon thebasis of the minimum rate for such risk.

5. No assessment shall be levied against any member orsubscriber with respect to any nonassessable policy issued in accordance withthis Code.

(Added to NRS by 1971, 1901)

NRS 696B.490 Assessmentprima facie correct; notice; payment; proceedings to collect.

1. Any assessment of a subscriber or member of aninsurer made by the Commissioner pursuant to the order of court fixing theaggregate amount of the assessment against all members or subscribers andapproving the classification and formula made by the Commissioner undersubsection 1 of NRS 696B.480 shall beprima facie correct.

2. Each member or subscriber shall be notified of theamount of the assessment to be paid by him by written notice mailed to theaddress of the member or subscriber last of record with the insurer. Failure ofthe member or subscriber to receive the notice so mailed, within the timespecified therein or at all, shall be no defense in any proceeding to collectthe assessment.

3. If any such member or subscriber fails to pay theassessment within the period specified in the notice, which period shall not beless than 20 days after mailing, the Commissioner may obtain an order in thedelinquency proceedings requiring the member or subscriber to show cause at atime and place fixed by the court why judgment should not be entered againstsuch member or subscriber for the amount of the assessment together with allcosts, and a copy of the order and a copy of the petition therefor shall beserved upon the member or subscriber within the time and in the mannerdesignated in the order.

4. If the subscriber or member, after due service of acopy of the order and petition referred to in subsection 3 is made upon him:

(a) Fails to appear at the time and place specified in theorder, judgment shall be entered against him as prayed for in the petition; or

(b) Appears in the manner and form required by law inresponse to the order, the court shall hear and determine the matter and entera judgment in accordance with its decision.

5. The Commissioner may collect any such assessmentthrough any other lawful means.

(Added to NRS by 1971, 1901)

NRS 696B.500 Summaryproceedings: Commissioners corrective orders authorized.

1. If the Commissioner determines after a hearing thatany insurer has committed or engaged in, or is committing or engaging in, or isabout to commit or engage in any act, practice or transaction that wouldsubject it to formal delinquency proceedings under this chapter, he may makeand serve upon the insurer and other persons involved, such orders (other thanseizure orders under NRS 696B.530 and 696B.540) as he deems reasonablynecessary to correct, eliminate or remedy such conduct, condition or ground.Orders to cure impairment of capital or surplus of a domestic insurer aresubject to NRS 693A.260 and 693A.270.

2. If the Commissioner believes that irreparable harmto the insurer, or its policyholders, creditors or the public may occur unlesshis order is issued with immediate effect, he may make and serve his orderwithout notice and before hearing, and shall simultaneously therewith serveupon the insurer and other persons involved the notice of hearing as requiredunder subsection 3.

3. The Commissioners order and notice of hearing shallbe served by personal service in any manner provided by the Nevada Rules ofCivil Procedure.

(Added to NRS by 1971, 1902)

NRS 696B.510 Summaryproceedings: Appeal from Commissioners order.

1. If the Commissioner has issued a summary orderbefore hearing as provided in subsection 2 of NRS 696B.500, any person upon whom suchorder is served may waive the Commissioners hearing and apply for anyimmediate judicial relief available under law and without first exhausting hisadministrative remedies.

2. NRS 679B.370(appeal from Commissioner) applies to appeals from the Commissioners ordermade after hearing.

(Added to NRS by 1971, 1902)

NRS 696B.520 Summaryproceedings: Enforcement; penalty.

1. The Commissioner may apply for and any districtcourt may grant such restraining orders, temporary and permanent injunctionsand other orders as may be deemed necessary to enforce the Commissionersorder.

2. A violation of any order of the Commissioner issuedunder NRS 696B.500 by any person as towhom the order is in effect subjects the person to a penalty of not more than$10,000, to be collected in a civil action brought by the Attorney General inthe name of the State of Nevada. The Attorney General shall deposit all moneyso collected in the State Treasury for credit to the State General Fund.

(Added to NRS by 1971, 1903; A 1979, 122; 1993, 573,1924, 2267; 1995, 692)

NRS 696B.530 Summaryproceedings: Seizure under court order.

1. Upon filing by the Commissioner in any districtcourt of this state of his verified petition alleging any ground for a formaldelinquency proceeding against an insurer under this chapter and that theinterests of the insurers policyholders or creditors or the public will bejeopardized by delay, and setting forth the order deemed necessary by theCommissioner, the court shall, ex parte and without notice or hearing, issuethe requested order. The requested order may:

(a) Direct the Commissioner to take possession andcontrol of all or part of the property, books, accounts and records of theinsurer and the premises occupied by it for transaction of its business; and

(b) Until further order of the court, enjoin theinsurer and its officers, managers, agents and employees from removal,concealment or other disposition of its property, and from the transaction ofits business, except with the Commissioners written consent.

2. The courts order shall be for such duration,specified in the order, as the court deems necessary to enable the Commissionerto ascertain the insurers condition. On motion of any party or on its ownmotion, the court may hold such hearings as it deems desirable after suchnotice as it deems appropriate, and extend or shorten the duration or modifythe terms of the order. The court shall vacate the seizure order if theCommissioner fails to commence a formal proceeding under this chapter afterreasonable opportunity to do so; and a seizure order is automatically vacatedby issuance of the courts order pursuant to formal delinquency proceedingsunder this chapter.

3. Entry of a seizure order under this section doesnot constitute an anticipatory breach of any contract of the insurer.

(Added to NRS by 1971, 1903)

NRS 696B.540 Summaryproceedings: Seizure under Commissioners order.

1. If it appears to the Commissioner that theinterests of policyholders, creditors or the public will be jeopardized bydelay incident to requesting a court seizure order, then on any ground whichwould justify a court seizure order under NRS696B.530, and without notice and without applying to the court, theCommissioner may issue a seizure order which must contain a statement verifiedby him of the grounds of his action. As directed by the seizure order, theCommissioners representatives shall forthwith take possession and control ofall or part of the property, books, accounts and records of the insurer, and ofthe premises occupied by the insurer for transaction of its business. TheCommissioner shall retain possession and control until the order is vacated oris replaced by an order of court pursuant to subsection 2, or pursuant to aformal proceeding under this chapter.

2. At any time after seizure under subsection 1, theinsurer may apply to the district court for Carson City. The court shallthereupon order the Commissioner to appear forthwith and shall thereafterproceed as if the order were a court seizure order issued under NRS 696B.530.

3. Every peace officer of this state shall assist theCommissioner in making and enforcing any such seizure, and every sheriff andpolice department shall furnish him with such deputies, patrolmen or officersas are necessary for the purpose.

4. Entry of a seizure order under this section doesnot constitute an anticipatory breach of any contract of the insurer.

(Added to NRS by 1971, 1904)

NRS 696B.550 Summaryproceedings: Conduct of administrative and judicial hearings.

1. The Commissioner shall hold all hearings in summaryproceedings privately unless the insurer requests a public hearing, in whichcase the hearing must be public.

2. The court may hold all hearings in summaryproceedings and judicial reviews thereof privately in chambers, and shall do soon request of the insurer proceeded against.

3. In all summary proceedings and judicial reviewsthereof, all records of the insurer, other documents and all Division files andcourt records and papers, so far as they pertain to or are part of the recordof the summary proceedings, are confidential except as necessary to obtaincompliance therewith, unless the court after hearing arguments by the partiesin chambers, orders otherwise, or unless the insurer requests that the matterbe made public. Until the court otherwise orders, all papers filed with theclerk of the court must be held by him in a confidential file.

4. If at any time it appears to the court that anyperson whose interest is or will be substantially affected by an order did notappear at the hearing and has not been served, the court may order that noticebe given and the proceedings be adjourned to give the person an opportunity toappear, on such terms as may be reasonable and just.

(Added to NRS by 1971, 1904; A 1991, 1635; 1993,1924)

NRS 696B.560 Summaryproceedings: Penalty for refusal to deliver property and records. Any person having possession or custody of and refusing todeliver to the Commissioner or his representative upon request any of theproperty, books, accounts, documents or other records of an insurer againstwhich a seizure order or a summary order has been issued by the Commissioner orby the court, as provided in NRS 696B.500to 696B.550, inclusive, is guilty of amisdemeanor.

(Added to NRS by 1971, 1905)

NRS 696B.565 Officers,agents, employees and attorneys of Division: Immunity from liability;indemnification.

1. The Commissioner, as receiver, all present andformer deputy receivers, special deputy receivers and their employees, and theother officers, agents, employees and attorneys of the Division are immune fromliability, both personally and in their official capacities, for any claim fordamage to or loss of property or personal injury or other civil liabilitycaused by or resulting from any alleged act, error or omission of the officers,agents, employees and attorneys of the Division arising out of or by reason oftheir duties or employment. This subsection must not be construed to hold theofficers, agents, employees and attorneys of the Division immune from liabilityfor any damage, loss, injury or liability caused by actual malice.

2. Attorneys, accountants, auditors and otherprofessional persons or firms who are retained by the Commissioner asindependent contractors and their employers must not be considered employeesfor the purposes of this chapter.

3. The Commissioner, all present and former deputyreceivers, special deputy receivers and their employees, and the otherofficers, agents, employees and attorneys of the Division must be indemnifiedfor all expenses, attorneys fees, judgments, settlements, decrees, or amountsdue or paid in satisfaction of, or incurred in the defense of, such a legalaction, unless it is determined upon a final adjudication on the merits of thecase that the alleged acts, error or omission of the officer, agent, employeeor attorney of the division did not arise out of or by reason of his duties oremployment and was caused by actual malice.

4. The State may seek indemnification for the paymentof expenses, judgments, settlements, decrees, attorneys fees, surety bondpremiums or other amounts paid or to be paid from the insurers assets. Anypayment pursuant to this section shall be deemed an administrative expense ofthe insurer.

(Added to NRS by 1997, 3037; A 2001, 2252)

NRS 696B.570 Federalreceivership.

1. If the Commissioner believes that rehabilitation orliquidation of a domestic insurer or alien insurer domiciled in this state upongrounds for such rehabilitation or liquidation set forth in this chapter wouldthereby be facilitated, and whether or not delinquency proceedings against theinsurer are already pending in the courts of this state, he may cause orconsent to the filing of a petition in a federal district court in anotherstate for the appointment of a federal receiver of the insurer. The Commissionermay intervene in any such action, and may accept appointment as the federalreceiver if so designated. Upon the designation of a federal receiver in anysuch action, the courts of this state shall relinquish jurisdiction of therehabilitation or liquidation of the insurer upon the Commissioners motiontherefor.

2. The provisions of this chapter relating todelinquency proceedings in courts of this state shall apply to such a federalreceivership to the extent applicable and appropriate.

3. If the Commissioner is appointed a federal receiverunder this section, he shall comply with any requirements necessary to give himtitle to and control over the insurers assets and affairs.

(Added to NRS by 1971, 1905)

 

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