This chapter may be cited as the
Insurance Holding Company Law.
(Added to NRS by 1973, 1037)
As used in this chapter, unless the
context otherwise requires, the words and terms defined in NRS 692C.025
to 692C.110 , inclusive, have the meanings ascribed to
them in those sections.
(Added to NRS by 1973, 1037; A 2003, 3322 )
“Acquisition” means any
agreement, arrangement or activity, the consummation of which results in
a person directly or indirectly acquiring the control of another person.
The term includes, but is not limited to:
1. The acquiring of a voting security;
2. The acquiring of any asset;
3. Bulk reinsurance; and
4. A merger.
(Added to NRS by 2003, 3318 )
“Affiliate” means a person who
directly or indirectly, through one or more intermediaries, controls or
is controlled by or is under common control with another designated
person.
(Added to NRS by 1973, 1037)
“Commissioner” means the
Commissioner of Insurance, his deputies, or the Division, as appropriate.
(Added to NRS by 1973, 1037; A 1991, 1633)
1. “Control” means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of
a person, whether through the ownership of voting securities, by contract
other than a commercial contract for goods or nonmanagement services or
otherwise, unless the power is the result of an official position with or
corporate office held by the person.
2. Control shall be presumed to exist if any person directly or
indirectly owns, controls, holds with the power to vote or holds proxies
representing 10 percent or more of the voting securities of any other
person. This presumption may be rebutted by a showing made in the manner
provided by NRS 692C.330 that control
does not exist in fact.
3. The Commissioner may determine, after furnishing all persons in
interest notice and opportunity to be heard and making specific findings
of fact to support such determination, that control exists in fact,
notwithstanding the absence of a presumption to that effect.
(Added to NRS by 1973, 1038, 1039)
“Insurance holding company system” means a combination of two or more
affiliated persons, one or more of which is an insurer.
(Added to NRS by 1973, 1038)
“Insurer” has the meaning
ascribed in NRS 679A.100 . It does not
include agencies, authorities or instrumentalities of the United States,
its possessions and territories, the Commonwealth of Puerto Rico, the
District of Columbia, or any state or political subdivision of a state.
(Added to NRS by 1973, 1038)
“Involved insurer”
includes an insurer that:
1. Acquires a person or is acquired by a person;
2. Is affiliated with an insurer that acquires a person or is
acquired by a person; or
3. Is the result of a merger.
(Added to NRS by 2003, 3318 )
“Person” includes an individual,
corporation, limited-liability company, partnership, association, joint
stock company, trust, unincorporated organization or any similar entity,
or any combination thereof acting in concert. The term does not include:
1. Any joint venture partnership that is exclusively engaged in
owning, managing, leasing or developing any real or tangible personal
property; or
2. Any securities broker performing no more than the usual and
customary broker’s function.
(Added to NRS by 1973, 1038; A 1985, 538; 2003, 3322 )
“Security holder” means
one who owns any security of a designated person, including common stock,
preferred stock, debt obligations, and any other security convertible
into or evidencing the right to acquire any of the foregoing.
(Added to NRS by 1973, 1038)
“Subsidiary” means an
affiliate of a designated person who is controlled by such person
directly or indirectly through one or more intermediaries.
(Added to NRS by 1973, 1038)
“Voting security”
includes any security convertible into or evidencing a right to acquire a
voting security.
(Added to NRS by 1973, 1038)
The Commissioner may,
pursuant to NRS 679B.130 , issue such
rules, regulations and orders as shall be necessary to carry out the
provisions of this chapter.
(Added to NRS by 1973, 1048)
FORMATION AND ACQUISITION OF SUBSIDIARIES; MERGERS
Any domestic insurer, either by itself or in cooperation
with one or more persons, may organize or acquire one or more
subsidiaries. Such subsidiaries may conduct any kind of business or
businesses and their authority to do so shall not be limited by reason of
the fact that they are subsidiaries of a domestic insurer.
(Added to NRS by 1973, 1038)
In addition to making investments in common stock, preferred stock, debt
obligations and other securities permitted under chapter 682A of NRS, a domestic insurer may invest:
1. In common stock, preferred stock, debt obligations and other
securities of one or more subsidiaries, amounts which do not exceed the
lesser of 10 percent of the insurer’s assets or 50 percent of its surplus
as regards policyholders, if the insurer’s surplus as regards
policyholders remains at a reasonable level in relation to the insurer’s
outstanding liabilities and adequate to its financial needs. In
calculating the amount of such investments, the following must be
included:
(a) Total money or other consideration expended and obligations
assumed in the acquisition or formation of a subsidiary, including all
organizational expenses and contributions to capital and surplus of the
subsidiary whether or not represented by the purchase of capital stock or
issuance of other securities; and
(b) All amounts expended in acquiring additional common stock,
preferred stock, debt obligations and other securities and all
contributions to the capital or surplus of a subsidiary after its
acquisition or formation.
2. Any amount in common stock, preferred stock, debt obligations
and other securities of one or more subsidiaries, if each subsidiary
agrees to limit its investments in any asset so that those investments
will not cause the amount of the total investment of the insurer to
exceed any of the investment limitations specified in subsection 1 or in
chapter 682A of NRS. For the purpose of
this subsection, “total investment of the insurer” includes any direct
investment by the insurer in an asset and the insurer’s proportionate
share of any investment in an asset by any subsidiary of the insurer,
which must be calculated by multiplying the amount of the subsidiary’s
investment by the percentage of the insurer’s ownership of the subsidiary.
3. Any amount in common stock, preferred stock, debt obligations
or other securities of one or more subsidiaries, with the approval of the
Commissioner, if the insurer’s surplus as regards policyholders remains
at a reasonable level in relation to the insurer’s outstanding
liabilities and adequate to its financial needs.
(Added to NRS by 1973, 1038; A 2001, 2229 ; 2003, 3322 )
Investments in common stock, preferred stock, debt obligations or other
securities of subsidiaries made pursuant to NRS 692C.140 shall not be subject to any of the otherwise
applicable restrictions or prohibitions contained in this chapter which
are applicable to such investments.
(Added to NRS by 1973, 1039)
Whether or not any investment made pursuant to NRS 692C.140 meets the applicable requirements thereof is
to be determined immediately after such investment is made, taking into
account the then outstanding principal balance on all previous
investments in debt obligations, and the value of all previous
investments in equity securities as of the date they were made.
(Added to NRS by 1973, 1039)
If an insurer ceases to control a subsidiary, it
shall dispose of any investment therein made pursuant to NRS 692C.140
within 3 years from the time of the
cessation of control or within such further time as the Commissioner may
prescribe, unless any such investment shall have met the requirements for
investment under any other section of this chapter, and the insurer has
notified the Commissioner thereof.
(Added to NRS by 1973, 1040)
1. No person other than the issuer may make a tender for or a
request or invitation for tenders of, or enter into any agreement to
exchange securities for, seek to acquire or acquire in the open market or
otherwise, any voting security of a domestic insurer if, after the
consummation thereof, he would directly or indirectly, or by conversion
or by exercise of any right to acquire, be in control of the insurer, nor
may any person enter into an agreement to merge with or otherwise acquire
control of a domestic insurer, unless, at the time any such offer,
request or invitation is made or any such agreement is entered into, or
before the acquisition of those securities if no offer or agreement is
involved, he has filed with the Commissioner and has sent to the insurer,
and the insurer has sent to its shareholders, a statement containing the
information required by NRS 692C.180
to 692C.250 , inclusive, and the
offer, request, invitation, agreement or acquisition has been approved by
the Commissioner in the manner prescribed in this chapter.
2. For purposes of this section, a domestic insurer includes any
other person controlling a domestic insurer unless the other person is
directly or through his affiliates primarily engaged in a business other
than the business of insurance. If a person is directly or through his
affiliates primarily engaged in a business other than the business of
insurance, he shall, at least 60 days before the proposed effective date
of the acquisition, file a notice of intent to acquire with the
Commissioner setting forth the information required by NRS 692C.254
.
(Added to NRS by 1973, 1040; A 2001, 2230 ; 2003, 3323 )
The
statement to be filed with the Commissioner hereunder shall be made under
oath or affirmation and shall contain the following:
1. The name and address of each person (hereinafter called the
“acquiring party”) by whom or on whose behalf the merger or other
acquisition of control referred to in NRS 692C.180 is to be effected and, if such person is:
(a) An individual, his principal occupation and all offices and
positions held by him during the past 5 years, and any conviction of
crimes other than for minor traffic violations during the past 10 years.
(b) Not an individual, a report of the nature of its business
operations during the past 5 years or for such lesser period as such
person and any predecessors thereof shall have been in existence,
together with an informative description of the business intended to be
done by such person and such person’s subsidiaries, and a list of all
individuals who are or who have been selected to become directors or
executive officers of such person or who perform or will perform
functions appropriate to such positions. Such list shall include for each
such individual the information required by paragraph (a) of this
subsection.
2. The source, nature and amount of the consideration used or to
be used in effecting the merger or other acquisition of control, a
description of any transaction wherein funds were or are to be obtained
for any such purpose, and the identity of persons furnishing such
consideration, but where a source of such consideration is a loan made in
the lender’s ordinary course of business, the identity of the lender
shall remain confidential, if the person filing such statement so
requests.
3. Fully audited financial information as to the earnings and
financial condition of each acquiring party for the preceding 5 fiscal
years of each such acquiring party (or for such lesser period as such
acquiring party and any predecessors thereof shall have been in
existence), and similar unaudited information as of a date not earlier
than 90 days prior to the filing of the statement.
4. Any plans or proposals which each acquiring party may have to
liquidate such insurer, to sell its assets or merge or consolidate it
with any person, or to make any other material change in its business or
corporate structure or management.
5. The number of shares of any security referred to in NRS
692C.180 which each acquiring party
proposes to acquire, and the terms of the offer, request, invitation,
agreement or acquisition referred to in NRS 692C.180 and a statement as to the method by which
the fairness of the proposal was determined.
6. The amount of each class of any security referred to in NRS
692C.180 which is beneficially owned
or concerning which there is a right to acquire beneficial ownership by
each acquiring party.
7. A full description of any contracts, arrangements or
understandings with respect to any security referred to in NRS 692C.180
in which any acquiring party is
involved, including but not limited to transfer of any of the securities,
joint ventures, loan or option arrangements, puts or calls, guarantees of
loans, guarantees against loss or guarantees of profits, division of
losses or profits or the giving or withholding of proxies. Such
description shall identify the persons with whom such contracts,
arrangements or understandings have been made.
8. A description of the purchase of any security referred to in
NRS 692C.180 during the 12 calendar
months preceding the filing of the statement by any acquiring party,
including the dates of purchase, names of the purchasers and
consideration paid or agreed to be paid therefor.
9. A description of any recommendations to purchase any security
referred to in NRS 692C.180 made
during the 12 calendar months preceding the filing of the statement by
any acquiring party, or by anyone based upon interviews with or at the
suggestion of such acquiring party.
10. Copies of all tenders, offers for, requests or invitations for
tenders of, exchange offers for, and agreements to acquire or exchange
any securities referred to in subsection 1, and, if distributed,
additional soliciting material relating thereto.
11. The terms of any agreement, contract or understanding made
with any broker-dealer, as to solicitation of securities referred to in
NRS 692C.180 , for tender, and the
amount of any fees, commissions or other compensation to be paid to
broker-dealers with regard thereto.
12. Such additional information as the Commissioner may by rule or
regulation prescribe as necessary or appropriate for the protection of
policy holders and security holders of the insurer or for the protection
of the public interest.
Ê If the person required to file the statement referred to in this
section is a partnership, limited partnership, syndicate or other group,
the Commissioner may require that the information required by subsections
1 to 12, inclusive, of this section, be given with respect to each
partner of such partnership or limited partnership, each member of such
syndicate or group, and each person who controls such partner or member.
If any such partner, member or person is a corporation or the person
required to file the statement referred to in NRS 692C.180 is a corporation, the Commissioner may
require that the information required by subsections 1 to 12, inclusive,
of this section, be given with respect to such corporation, each officer
and director of such corporation, and each person who is directly or
indirectly the beneficial owner of more than 10 percent of the
outstanding voting securities of such corporation. If any material change
occurs in the facts set forth in the statement filed with the
Commissioner and sent to such insurer pursuant to this section, an
amendment setting forth such change, together with copies of all
documents and other material relevant to such change, shall be filed with
the Commissioner and sent to such insurer within 2 business days after
the person learns of such change. Such insurer shall send each such
amendment to its shareholders.
(Added to NRS by 1973, 1040)
If any offer, request, invitation, agreement or acquisition referred to
in NRS 692C.180 is proposed to be
made by means of a registration statement under the Securities Act of
1933, 15 U.S.C. §§ 77a to 77aa, inclusive, or in circumstances requiring
the disclosure of similar information under the Securities Exchange Act
of 1934, 15 U.S.C. §§ 77b et seq., or under any state law requiring
similar registration or disclosure, the person required to file the
statement referred to in NRS 692C.180
may utilize such documents in furnishing the information called for by
that statement.
(Added to NRS by 1973, 1042)
1. Except as otherwise provided in subsection 5, the Commissioner
shall approve any merger or other acquisition of control referred to in
NRS 692C.180 unless, after a public
hearing thereon, he finds that:
(a) After the change of control, the domestic insurer specified in
NRS 692C.180 would not be able to
satisfy the requirements for the issuance of a license to write the line
or lines of insurance for which it is presently licensed;
(b) The effect of the merger or other acquisition of control would
be substantially to lessen competition in insurance in this state or tend
to create a monopoly;
(c) The financial condition of any acquiring party may jeopardize
the financial stability of the insurer, or prejudice the interest of its
policyholders or the interests of any remaining security holders who are
unaffiliated with the acquiring party;
(d) The terms of the offer, request, invitation, agreement or
acquisition referred to in NRS 692C.180 are unfair and unreasonable to the security
holders of the insurer;
(e) The plans or proposals which the acquiring party has to
liquidate the insurer, sell its assets or consolidate or merge it with
any person, or to make any other material change in its business or
corporate structure or management, are unfair and unreasonable to
policyholders of the insurer and not in the public interest;
(f) The competence, experience and integrity of those persons who
would control the operation of the insurer are such that it would not be
in the interest of policyholders of the insurer and of the public to
permit the merger or other acquisition of control; or
(g) If approved, the merger or acquisition of control would likely
be harmful or prejudicial to the members of the public who purchase
insurance.
2. The public hearing specified in subsection 1 must be held
within 30 days after the statement required by NRS 692C.180 has been filed, and at least 20 days’ notice
thereof must be given by the Commissioner to the person filing the
statement. Not less than 7 days’ notice of the public hearing must be
given by the person filing the statement to the insurer and to any other
person designated by the Commissioner. The insurer shall give such notice
to its security holders. The Commissioner shall make a determination
within 30 days after the conclusion of the hearing. If he determines that
an infusion of capital to restore capital in connection with the change
in control is required, the requirement must be met within 60 days after
notification is given of the determination. At the hearing, the person
filing the statement, the insurer, any person to whom notice of hearing
was sent and any other person whose interests may be affected thereby may
present evidence, examine and cross-examine witnesses, and offer oral and
written arguments and, in connection therewith, may conduct discovery
proceedings in the same manner as is presently allowed in the district
court of this state. All discovery proceedings must be concluded not
later than 3 days before the commencement of the public hearing.
3. The Commissioner may retain at the acquiring party’s expense
attorneys, actuaries, accountants and other experts not otherwise a part
of his staff as may be reasonably necessary to assist him in reviewing
the proposed acquisition of control.
4. The period for review by the Commissioner must not exceed the
60 days allowed between the filing of the notice of intent to acquire
required pursuant to subsection 2 of NRS 692C.180 and the date of the proposed acquisition if
the proposed affiliation or change of control involves a financial
institution, or an affiliate of a financial institution, and an insured.
5. When making a determination pursuant to paragraph (b) of
subsection 1, the Commissioner:
(a) Shall require the submission of the information specified in
subsection 2 of NRS 692C.254 ;
(b) Shall not disapprove the merger or acquisition of control if he
finds that any of the circumstances specified in subsection 3 of NRS
692C.256 exist; and
(c) May condition his approval of the merger or acquisition of
control in the manner provided in subsection 4 of NRS 692C.258 .
6. If, in connection with a change of control of a domestic
insurer, the Commissioner determines that the person who is acquiring
control of the domestic insurer must maintain or restore the capital of
the domestic insurer in an amount that is required by the laws and
regulations of this state, the Commissioner shall make the determination
not later than 60 days after the notice of intent to acquire required
pursuant to subsection 2 of NRS 692C.180 is filed with the Commissioner.
(Added to NRS by 1973, 1042; A 1985, 1070; 1995, 1775; 2001, 2230
; 2003, 3323 )
All
statements, amendments or other material filed pursuant to NRS 692C.180
and 692C.190 and all notices of public hearings held
pursuant to NRS 692C.210 shall be
mailed by the insurer to its shareholders within 5 business days after
the insurer has received such statements, amendments, other material or
notices. The expenses of mailing shall be borne by the person making the
filing. As security for the payment of such expenses, such person shall
file with the Commissioner an acceptable bond or other deposit in an
amount to be determined by the Commissioner.
(Added to NRS by 1973, 1043)
The provisions of NRS 692C.180 to 692C.250 , inclusive, do not apply to:
1. A transaction which is subject to the provisions of NRS
693A.290 to 693A.370 , inclusive, dealing with the merger or
consolidation of two or more insurers.
2. Any offer, request, invitation, agreement or acquisition which
the Commissioner by order exempts therefrom as not having been made or
entered into for the purpose and not having the effect of changing or
influencing the control of a domestic insurer, or as otherwise not
comprehended within the purposes of NRS 692C.180 to 692C.250 , inclusive.
(Added to NRS by 1973, 1043; A 1995, 1776)
The following shall be violations of NRS
692C.180 to 692C.250 , inclusive:
1. The failure to file any statement, amendment or other material
required to be filed pursuant to NRS 692C.180 or 692C.190 ; or
2. The effectuation or any attempt to effectuate an acquisition of
control of, or merger with, a domestic insurer unless the Commissioner
has given his approval thereto.
(Added to NRS by 1973, 1044)
1. The courts of this state are hereby vested with jurisdiction
over every person not resident, domiciled or authorized to do business in
this state who files a statement with the Commissioner under NRS 692C.180
to 692C.250 , inclusive, and over all actions involving
such person arising out of violations of such sections.
2. Each such person shall be deemed to have performed acts
equivalent to and constituting an appointment by such a person of the
Commissioner to be his true and lawful attorney upon whom may be served
all lawful process in any action, suit or proceeding arising out of
violations of NRS 692C.180 to
692C.250 , inclusive. Copies of all
such lawful process shall be served on the Commissioner and transmitted
by registered or certified mail by the Commissioner to such person at his
last known address.
(Added to NRS by 1973, 1044)
REVIEW OF ACQUISITION BY COMMISSIONER
The provisions of this chapter apply
to any acquisition in which a change in control of an insurer who is
authorized to do business in this state occurs, except:
1. An acquisition that is subject to approval or disapproval by
the Commissioner pursuant to NRS 692C.180 to 692C.250 , inclusive.
2. A purchase of securities solely for investment purposes if the
securities are not used for voting or not otherwise used to cause or
attempt to cause a substantial lessening of competition in any insurance
market in this state, except that, if a purchase of securities creates a
presumption of control of the insurer pursuant to subsection 2 of NRS
692C.050 , the purchase is not solely
for investment purposes unless the commissioner of insurance of the
insurer’s state of domicile:
(a) Accepts a disclaimer of control or affirmatively finds that
control does not exist; and
(b) Submits the accepted disclaimer or a statement setting forth
the affirmative finding to the Commissioner.
3. An acquisition of a person by another person if:
(a) Each of those persons is not directly or through an affiliate
primarily engaged in the business of insurance; and
(b) At least 30 days before the effective date of the acquisition,
a notice is filed with the Commissioner in accordance with NRS 692C.254
, if required.
4. An acquisition by a person of an affiliate of that person.
5. An acquisition that does not immediately cause:
(a) The combined market share of the involved insurers to exceed 5
percent of the total market;
(b) An increase in any market share; or
(c) For any market:
(1) The combined market share of the involved insurers to
exceed 12 percent of the total market; and
(2) The market share to increase by more than 2 percent of
the total market.
Ê As used in this subsection, “market” means direct written premiums in
this state for a line of authority set forth in the annual statement
required to be filed by insurers authorized to do business in this state.
6. An acquisition for which, solely because of the effect of the
acquisition on ocean marine insurance, a notification is required
pursuant to this section.
7. An acquisition of an insurer whose domiciliary commissioner of
insurance:
(a) Determines that:
(1) The insurer is in a failing condition;
(2) A feasible alternative for improving that condition does
not exist; and
(3) The public benefit received from improving that
condition through the acquisition of the insurer outweighs the public
benefit received from increasing competition; and
(b) Submits his determination made pursuant to paragraph (a) to the
Commissioner.
(Added to NRS by 2003, 3318 )
1. An acquisition to which the provisions of NRS 692C.252 apply is subject to an order issued pursuant
to NRS 692C.258 unless:
(a) The acquiring person files a notice of acquisition pursuant to
this section; and
(b) The waiting period specified in subsection 4 has expired.
2. The Commissioner shall prescribe the form of the notice
required pursuant to subsection 1. A notice of acquisition filed pursuant
to this section must include:
(a) The information required by the National Association of
Insurance Commissioners relating to any market that, pursuant to
subsection 5 of NRS 692C.252 , causes
the acquisition not to be exempted from the provisions of this section;
and
(b) Any other material or information required by the Commissioner
to determine whether or not the proposed acquisition, if consummated,
would violate the provisions of NRS 692C.256 .
3. The information required pursuant to subsection 2 may include
the opinion of an economist relating to the competitive effect of the
acquisition on the business of insurance in this state if the opinion is
accompanied by a summary of the education and experience of the economist
and a statement indicating his ability to provide an informed opinion.
4. Except as otherwise provided in subsection 5, the waiting
period for an acquisition required pursuant to subsection 1 begins on the
date the Commissioner receives the notice filed pursuant to subsection 1
and ends on the expiration of 30 days after that date or on the
expiration of a shorter period prescribed by the Commissioner, whichever
is earlier.
5. Before the expiration of the waiting period specified in
subsection 4, the Commissioner may, not more than once, require a person
to submit additional information relating to the proposed acquisition. If
the Commissioner requires the submission of additional information, the
waiting period for the acquisition ends upon the expiration of 30 days
after the Commissioner receives the additional information or upon the
expiration of a shorter period prescribed by the Commissioner, whichever
is earlier.
(Added to NRS by 2003, 3319 )
1. The Commissioner may issue an order pursuant to NRS 692C.258
relating to an acquisition if:
(a) The effect of the acquisition may substantially lessen
competition in any line of insurance in this state or tend to create a
monopoly; or
(b) The acquiring person fails to file sufficient materials or
information pursuant to NRS 692C.254 .
2. In determining whether to issue an order pursuant to subsection
1, the Commissioner shall consider the standards set forth in the
Horizontal Merger Guidelines issued by the United States Department of
Justice and the Federal Trade Commission and in effect at the time the
Commissioner receives the notice required pursuant to NRS 692C.254 .
3. The Commissioner shall not issue an order specified in
subsection 1:
(a) If:
(1) The acquisition creates substantial economies of scale
or economies in the use of resources that may not be created in any other
manner; and
(2) The public benefit received from those economies exceeds
the public benefit received from not lessening competition; or
(b) If:
(1) The acquisition substantially increases the availability
of insurance; and
(2) The public benefit received by that increase exceeds the
public benefit received from not lessening competition.
4. The public benefits set forth in subparagraph 2 of paragraphs
(a) and (b) of subsection 3 may be considered together, as applicable, in
assessing whether the public benefits received from the acquisition
exceed any benefit to competition that would arise from disapproving the
acquisition.
5. The Commissioner has the burden of establishing a violation of
the competitive standard set forth in subsection 1.
(Added to NRS by 2003, 3319 )
1. Except as otherwise provided in this section, if the
Commissioner determines that an acquisition may substantially lessen
competition in any line of insurance in this state or tends to create a
monopoly, he may issue an order:
(a) Requiring an involved insurer to cease and desist from doing
business in this state relating to that line of insurance; or
(b) Denying the application of an acquired or acquiring insurer for
a license or authority to do business in this state.
2. The Commissioner shall not issue an order pursuant to
subsection 1 unless:
(a) He conducts a hearing concerning the acquisition in accordance
with NRS 679B.310 to 679B.370 , inclusive;
(b) A notice of the hearing is issued before the expiration of the
waiting period for the acquisition specified in NRS 692C.254 , but not less than 15 days before the
hearing; and
(c) The hearing is conducted and the order is issued not later than
60 days after the expiration of the waiting period.
3. Each order issued pursuant to subsection 1 must include a
written decision of the Commissioner setting forth his findings of fact
and conclusions of law relating to the acquisition.
4. An order issued pursuant to this section does not become final
until 30 days after it is issued, during which time the involved insurer
may submit to the Commissioner a plan to remedy, within a reasonable
period, the anticompetitive effect of the acquisition. As soon as
practicable after receiving the plan, the Commissioner shall, based upon
the plan and any information included in the plan, issue a written
determination setting forth:
(a) The conditions or actions, if any, required to:
(1) Eliminate the anticompetitive effect of the acquisition;
and
(2) Vacate or modify the order; and
(b) The period in which the conditions or actions specified in
paragraph (a) must be performed.
5. An order issued pursuant to subsection 1 does not apply to an
acquisition that is not consummated.
6. A person who violates a cease and desist order issued pursuant
to this section during any period in which the order is in effect is
subject, at the discretion of the Commissioner, to:
(a) The imposition of a civil penalty of not more than $10,000 per
day for each day the violation continues;
(b) The suspension or revocation of the person’s license or
certificate of authority; or
(c) Both the imposition of a civil penalty pursuant to paragraph
(a) and the suspension or revocation of the person’s license or
certificate of authority pursuant to paragraph (b).
7. In addition to any fine imposed pursuant to NRS 692C.480 , any insurer or other person who fails to
make any filing required by NRS 692C.252 to 692C.258 , inclusive, and who fails to make a good
faith effort to comply with any such requirement is subject to a fine of
not more than $50,000.
8. The provisions of NRS 692C.430 , 692C.440 and 692C.460 do not apply to an acquisition to which the
provisions of NRS 692C.252 apply.
(Added to NRS by 2003, 3320 )
REGISTRATION
1. Every insurer which is authorized to do business in this state
and which is a member of an insurance holding company system shall
register with the Commissioner, except a foreign insurer subject to
disclosure requirements and standards adopted by a statute or regulation
in the jurisdiction of its domicile which are substantially similar to
those contained in NRS 692C.260 to
692C.350 , inclusive.
2. Any insurer which is subject to registration under NRS 692C.260
to 692C.350 , inclusive, shall register not later than
September 1, 1973, or 15 days after it becomes subject to registration,
whichever is later, unless the Commissioner for good cause shown extends
the time for registration. The Commissioner may require any authorized
insurer which is a member of a holding company system which is not
subject to registration under this section to furnish a copy of the
registration statement or other information filed by the insurance
company with the insurance regulatory authority of domiciliary
jurisdiction.
3. Any person within an insurance holding company system subject
to registration shall, upon request by an insurer, provide complete and
accurate information to the insurer if the information is reasonably
necessary to enable the insurer to comply with the provisions of this
section.
(Added to NRS by 1973, 1044; A 2003, 3325 )
Every insurer
subject to registration shall file a registration statement on a form
provided by the Commissioner, which must contain current information
about:
1. The capital structure, general financial condition, ownership
and management of the insurer and any person controlling the insurer.
2. The identity of every member of the insurance holding company
system.
3. The following agreements in force, relationships subsisting and
transactions currently outstanding between the insurer and its affiliates:
(a) Loans, other investments or purchases, sales or exchanges of
securities of the affiliates by the insurer or of the insurer by its
affiliates.
(b) Purchases, sales or exchanges of assets.
(c) Transactions not in the ordinary course of business.
(d) Guarantees or undertakings for the benefit of an affiliate
which result in an actual contingent exposure of the insurer’s assets to
liability, other than insurance contracts entered into in the ordinary
course of the insurer’s business.
(e) All management and service contracts and all cost-sharing
arrangements, other than cost allocation arrangements based upon
generally accepted accounting principles.
(f) Reinsurance agreements covering all or substantially all of one
or more lines of insurance of the ceding company.
(g) Any dividend or other distribution made to a shareholder.
(h) Any consolidated agreement to allocate taxes.
4. Any pledge of the insurer’s stock, including the stock of any
subsidiary or controlling affiliate of the insurer, for a loan made to
any member of the insurance holding company system.
5. Any other matters concerning transactions between registered
insurers and any affiliates as may be included from time to time in any
registration forms adopted or approved by the Commissioner.
(Added to NRS by 1973, 1044; A 2003, 3325 )
No
information need be disclosed on the registration statement filed
pursuant to NRS 692C.270 if such
information is not material for the purposes of NRS 692C.260 to 692C.350 , inclusive. Unless the Commissioner by rule,
regulation or order provides otherwise, sales, purchases, exchanges,
loans or extensions of credit, or investments involving one-half of 1
percent or less of an insurer’s admitted assets as of the 31st day of
December next preceding, shall not be deemed material for purposes of NRS
692C.260 to 692C.350 , inclusive.
(Added to NRS by 1973, 1045)
Each registered insurer shall keep
current the information required to be disclosed in its registration
statement by reporting all material changes or additions on forms
provided by the Commissioner within 15 days after the end of the month in
which it learns of each such change or addition, and not less often than
annually, except that, subject to the provisions of NRS 692C.390 , each registered insurer shall report all
dividends and other distributions to shareholders within 5 business days
following the declaration and 10 days before payment.
(Added to NRS by 1973, 1045; A 1995, 1776)
The Commissioner shall
terminate the registration of any insurer which demonstrates that it no
longer is a member of an insurance holding company system.
(Added to NRS by 1973, 1045)
The Commissioner may
require or allow two or more affiliated insurers subject to registration
hereunder to file a consolidated registration statement or consolidated
reports amending their consolidated registration statement or their
individual registration statements.
(Added to NRS by 1973, 1045)
The
Commissioner may allow an insurer which is authorized to do business in
this state and which is part of an insurance holding company system to
register on behalf of any affiliated insurer which is required to
register under NRS 692C.260 , and to
file all information and material required to be filed under NRS 692C.260
to 692C.350 , inclusive.
(Added to NRS by 1973, 1045)
1. Any person may file with the Commissioner:
(a) A disclaimer of affiliation with any authorized insurer
specified in the disclaimer; or
(b) A request for a termination of registration on the basis that
the person does not, or will not after taking an action specified in the
request for termination, control another person specified in the request.
2. A disclaimer of affiliation or request for a termination of
registration specified in subsection 1 may be filed by the authorized
insurer or any member of an insurance holding company system. A
disclaimer of affiliation or request for a termination of registration
filed pursuant to subsection 1 must include:
(a) A statement indicating the number of authorized, issued and
outstanding voting securities of the person specified in the disclaimer
of affiliation or request for a termination of registration;
(b) A statement indicating the number and percentage of shares of
the person specified in the disclaimer of affiliation or request for a
termination of registration that are owned or beneficially owned by the
person disclaiming control, and the number of those shares for which the
person disclaiming control has a direct or indirect right to acquire;
(c) A statement setting forth all material relationships and bases
for affiliation between the person specified in the disclaimer of
affiliation or request for a termination of registration and the person
and any affiliate of the person who is disclaiming control of the person
specified in the disclaimer of affiliation or request for a termination
of registration; and
(d) An explanation of why the person who is disclaiming control
does not control the person specified in the disclaimer of affiliation or
request for a termination of registration.
3. A request for a termination of registration filed pursuant to
subsection 1 shall be deemed granted upon filing unless the Commissioner,
within 30 days after receipt of the request for a termination of
registration, notifies the person, authorized insurer or member of an
insurance holding company system that the request is denied.
4. After a disclaimer of affiliation has been filed, the insurer
is relieved of any duty to register or report under NRS 692C.260 to 692C.350 , inclusive, which may arise out of the
insurer’s relationship with the person unless the Commissioner disallows
the disclaimer. The Commissioner may disallow the disclaimer only after
furnishing all parties in interest with a notice and opportunity to be
heard and after making specific findings of fact to support the
disallowance.
(Added to NRS by 1973, 1046; A 2003, 3326 )
The provisions of NRS 692C.260 to 692C.350 , inclusive, shall not apply to any insurer,
information or transaction if and to the extent that the Commissioner by
rule, regulation or order shall exempt the same from the provisions of
NRS 692C.260 to 692C.350 , inclusive.
(Added to NRS by 1973, 1046)
1. The failure to file a registration statement or any amendment
thereto required by NRS 692C.260 to
692C.350 , inclusive, within the time
specified for the filing is a violation of NRS 692C.260 to 692C.350 , inclusive.
2. Except as otherwise provided in subsection 3, if an insurer
fails, without just cause, to file a registration statement required
pursuant to NRS 692C.270 , the insurer
shall, after receiving notice and a hearing, pay a civil penalty of $100
for each day the insurer fails to file the registration statement. The
civil penalty may be recovered in a civil action brought by the
Commissioner. Any civil penalty paid pursuant to this subsection must be
deposited in the State General Fund.
3. The maximum civil penalty that may be imposed pursuant to
subsection 2 is $20,000. The Commissioner may reduce the amount of the
civil penalty if the insurer demonstrates to the satisfaction of the
Commissioner that the payment of the civil penalty would impose a
financial hardship on the insurer.
4. Any officer, director or employee of an insurance holding
company system who willfully and knowingly subscribes to or makes or
causes to be made any false statement, false report or false filing with
the intent to deceive the Commissioner in the performance of his duties
pursuant to NRS 692C.260 to 692C.350
, inclusive, is guilty of a category D
felony and shall be punished as provided in NRS 193.130 . The officer, director or employee is
personally liable for any fine imposed against him pursuant to that
section.
(Added to NRS by 1973, 1046; A 2003, 3327 )
MISCELLANEOUS PROVISIONS
An insurer,
financial holding company, depositary institution or affiliate of any of
them which proposes an acquisition or change or continuation of control
of an insurer domiciled in this state shall give notice to the
Commissioner of the proposed action no later than 60 days before the
proposed action is to become effective. During this period, the
Commissioner may collect, review and act upon applications and other
documents or reports relating to the proposed action under his authority
conferred by this title.
(Added to NRS by 2001, 2228 )
Material transactions
by registered insurers with their affiliates are subject to all of the
following standards:
1. The terms must be fair and reasonable.
2. Charges or fees for services performed must be reasonable.
3. Expenses incurred and payment received must be allocated to the
insurer in conformity with customary accounting practices concerning
insurance consistently applied.
4. The books, accounts and records of each party must be so
maintained as to disclose clearly and accurately the precise nature and
details of the transactions.
5. The insurer’s surplus as regards policyholders following any
dividends or distributions to shareholder affiliates must be reasonable
in relation to the insurer’s outstanding liabilities and adequate to its
financial needs.
(Added to NRS by 1973, 1046; A 1995, 1776)
1. A domestic insurer shall not enter into any of the following
transactions with an affiliate unless the insurer has notified the
Commissioner in writing of its intention to enter into the transaction at
least 60 days previously, or such shorter period as the Commissioner may
permit, and the Commissioner has not disapproved it within that period:
(a) A sale, purchase, exchange, loan or extension of credit,
guaranty or investment if the transaction equals at least:
(1) With respect to an insurer other than a life insurer,
the lesser of 3 percent of the insurer’s admitted assets or 25 percent of
surplus as regards policyholders; or
(2) With respect to a life insurer, 3 percent of the
insurer’s admitted assets,
Ê computed as of December 31 next preceding the transaction.
(b) A loan or extension of credit to any person who is not an
affiliate, if the insurer makes the loan or extension of credit with the
agreement or understanding that the proceeds of the transaction, in whole
or in substantial part, are to be used to make loans or extensions of
credit to, to purchase assets of, or to make investments in, any
affiliate of the insurer if the transaction equals at least:
(1) With respect to insurers other than life insurers, the
lesser of 3 percent of the insurer’s admitted assets or 25 percent of
surplus as regards policyholders; or
(2) With respect to life insurers, 3 percent of the
insurer’s admitted assets,
Ê computed as of December 31 next preceding the transaction.
(c) An agreement for reinsurance or a modification thereto in which
the premium for reinsurance or a change in the insurer’s liabilities
equals at least 5 percent of the insurer’s surplus as regards
policyholders as of December 31 next preceding the transaction, including
an agreement which requires as consideration the transfer of assets from
an insurer to a nonaffiliate, if an agreement or understanding exists
between the insurer and nonaffiliate that any portion of those assets
will be transferred to an affiliate of the insurer.
(d) An agreement for management, contract for service, guarantee or
arrangement to share costs.
(e) A guaranty made by a domestic insurer, except that a guaranty
that is quantifiable as to amount is not subject to the provisions of
this subsection unless the guaranty exceeds the lesser of one-half of 1
percent of the admitted assets of the domestic insurer or 10 percent of
its surplus as regards policyholders as of December 31 next preceding the
guaranty.
(f) Except as otherwise provided in subsection 3, a direct or
indirect acquisition of or investment in a person who controls the
domestic insurer or an affiliate of the domestic insurer in an amount
that, when added to its present holdings, exceeds 2.5 percent of the
domestic insurer’s surplus to policyholders.
(g) A material transaction, specified by regulation, which the
Commissioner determines may adversely affect the interest of the
insurer’s policyholders.
2. This section does not authorize or permit any transaction
which, in the case of an insurer not an affiliate, would be contrary to
law.
3. The provisions of paragraph (f) of subsection 1 do not apply to
a direct or indirect acquisition of or investment in:
(a) A subsidiary acquired in accordance with this section or NRS
692C.140 ; or
(b) A nonsubsidiary insurance affiliate that is subject to the
provisions of this chapter.
(Added to NRS by 1995, 1773; A 2001, 2231 ; 2003, 3327 )
1. A domestic insurer may not intentionally enter into
transactions which are part of a plan or series of like transactions with
affiliates if the purpose of those separate transactions is to avoid the
threshold provided in NRS 692C.363
and thus avoid the review that would otherwise occur. If the Commissioner
determines that such separate transactions were entered into over any
12-month period for that purpose, he may exercise his authority pursuant
to NRS 692C.410 to 692C.490 , inclusive.
2. The Commissioner, in reviewing transactions pursuant to this
section and NRS 692C.363 , shall
consider whether the transactions comply with the standards set forth in
NRS 692C.360 and 692C.370 and whether the transactions may adversely
affect the interests of policyholders.
3. A domestic insurer shall notify the Commissioner within 30 days
after it makes an investment in any corporation if the total investment
in that corporation by it and its affiliates exceeds 10 percent of the
corporation’s voting securities.
(Added to NRS by 1995, 1774)
For the purposes of this
chapter, in determining whether or not an insurer’s surplus as regards
policyholders is reasonable in relation to the insurer’s outstanding
liabilities and adequate to its financial needs, the following factors
among others must be considered:
1. The size of the insurer as measured by its assets, capital and
surplus, reserves, premium writings, insurance in force and other
appropriate criteria.
2. The extent to which the insurer’s business is diversified among
the several lines of insurance.
3. The number and size of risks insured in each line of business.
4. The extent of the geographical dispersion of the insurer’s
insured risks.
5. The nature and extent of the insurer’s reinsurance program.
6. The quality, diversification and liquidity of the insurer’s
investment portfolio.
7. The recent past and projected future trend in the size of the
insurer’s surplus as regards policyholders.
8. The surplus as regards policyholders maintained by other
comparable insurers.
9. The adequacy of the insurer’s reserves.
10. The quality and liquidity of investments in subsidiaries made
pursuant to NRS 692C.180 to 692C.250
, inclusive. The Commissioner may
treat any such investment as a disallowed asset for purposes of
determining the adequacy of surplus as regards policyholders whenever in
his judgment such investment so warrants.
11. The quality of the insurer’s earnings and the extent to which
the reported earnings of the insurer include extraordinary items. As used
in this subsection, the term “extraordinary item” means a nonrecurring
occurrence or event.
(Added to NRS by 1973, 1046; A 1995, 1777)
For purposes of NRS 692C.360 to 692C.400 , inclusive, an extraordinary dividend or
distribution includes any dividend or distribution of cash or other
property, whose fair market value together with that of other dividends
or distributions made within the preceding 12 months exceeds the greater
of:
1. Ten percent of the insurer’s surplus as regards policyholders
as of December 31 next preceding the dividend or distribution; or
2. The net gain from operations of the insurer, if the insurer is
a life insurer, or the net income, not including realized capital gains
if the insurer is not a life insurer, for the 12-month period ending
December 31 next preceding the dividend or distribution,
Ê but does not include pro rata distributions of any class of the
insurer’s own securities.
(Added to NRS by 1973, 1047; A 1995, 1777; 2003, 325 )
1. An insurer subject to registration under NRS 692C.260 to 692C.350 , inclusive, shall not pay any extraordinary
dividend or make any other extraordinary distribution to its shareholders
until:
(a) Thirty days after the Commissioner has received notice of the
declaration thereof and has not within that period disapproved the
payment; or
(b) The Commissioner approves the payment within the 30-day period.
2. A request for approval of an extraordinary dividend or any
other extraordinary distribution pursuant to subsection 1 must include:
(a) A statement indicating the amount of the proposed dividend or
distribution;
(b) The date established for the payment of the proposed dividend
or distribution;
(c) A statement indicating whether the proposed dividend or
distribution is to be paid in the form of cash or property and, if it is
to be paid in the form of property, a description of the property, its
cost and its fair market value together with an explanation setting forth
the basis for determining its fair market value;
(d) A copy of a work paper or other document setting forth the
calculations used to determine that the proposed dividend or distribution
is extraordinary, including:
(1) The amount, date and form of payment of each regular
dividend or distribution paid by the insurer, other than any distribution
of a security of the insurer, within the 12 consecutive months
immediately preceding the date established for the payment of the
proposed dividend or distribution;
(2) The amount of surplus, if any, as regards policyholders,
including total capital and surplus, as of December 31 next preceding;
(3) If the insurer is a life insurer, the amount of any net
gains obtained from the operations of the insurer for the 12-month period
ending December 31 next preceding;
(4) If the insurer is not a life insurer, the amount of net
income of the insurer less any realized capital gains for the 12-month
period ending on the December 31 of the year next preceding and the two
consecutive 12-month periods immediately preceding that period; and
(5) If the insurer is not a life insurer, the amount of each
dividend paid by the insurer to shareholders, other than a distribution
of any securities of the insurer, during the preceding 2 calendar years;
(e) A balance sheet and statement of income for the period
beginning on the date of the last annual statement filed by the insurer
with the Commissioner and ending on the last day of the month immediately
preceding the month in which the insurer files the request for approval;
and
(f) A brief statement setting forth:
(1) The effect of the proposed dividend or distribution upon
the insurer’s surplus;
(2) The reasonableness of the insurer’s surplus in relation
to the insurer’s outstanding liabilities; and
(3) The adequacy of the insurer’s surplus in relation to the
insurer’s financial requirements.
3. Each insurer specified in subsection 1 that pays an
extraordinary dividend or makes any other extraordinary distribution to
its shareholders shall, within 15 days after declaring the dividend or
making the distribution, report that fact to the Commissioner. The report
must include the information specified in paragraph (d) of subsection 2.
(Added to NRS by 1973, 1047; A 2003, 3328 )
Notwithstanding any other provision of law, an
insurer may declare an extraordinary dividend or distribution which is
conditional upon the Commissioner’s approval thereof, and such a
declaration shall confer no rights upon shareholders until:
1. The Commissioner has approved the payment of such dividend or
distribution; or
2. The Commissioner has not disapproved such payment within the
30-day period referred to in NRS 692C.390 .
(Added to NRS by 1973, 1047)
1. If an order for liquidation or rehabilitation of a domestic
insurer has been entered, the receiver appointed under the order may
recover on behalf of the insurer:
(a) From any parent corporation or holding company, or person or
affiliate who otherwise controlled the insurer, the amount of
distributions, other than distributions of shares of the same class of
stock, paid by the insurer on its capital stock; or
(b) Any payment in the form of a bonus, settlement on termination,
or extraordinary adjustment of salary in a lump sum made by the insurer
or a subsidiary to a director, officer or employee,
Ê if the distribution or payment is made at any time during the year
preceding the petition for liquidation, conservation or rehabilitation,
as the case may be, subject to the limitations of subsection 2 and of NRS
692C.404 .
2. Such a distribution is not recoverable if the parent or
affiliate shows that, when paid, the distribution was lawful and
reasonable, and that the insurer did not know and could not reasonably
have known that the distribution might adversely affect its ability to
fulfill its contractual obligations.
(Added to NRS by 1995, 1774)
1. A person who was a parent corporation or holding company, or a
person who otherwise controlled the insurer or affiliate, at the time the
distributions were paid is liable up to the amount of distributions or
payments he received. Any person who otherwise controlled the insurer at
the time the distributions were declared is liable up to the amount of
distributions he would have received if they had been paid immediately.
If two or more persons are liable with respect to the same distributions,
they are jointly and severally liable.
2. The maximum amount recoverable under this section and NRS
692C.402 is the amount needed in
excess of all other available assets of the impaired or insolvent insurer
to pay the contractual obligations of the impaired or insolvent insurer
and to reimburse any guaranty funds.
3. To the extent that any person liable under this section is
insolvent or otherwise fails to pay claims due from it pursuant to this
section, its parent corporation or holding company, or person who
otherwise controlled it, at the time the distribution was paid is jointly
and severally liable for any resulting deficiency in the amount recovered
from the parent corporation or holding company, or person who otherwise
controlled the insurer.
(Added to NRS by 1995, 1774)
REMEDIES; PENALTIES
1. Subject to the limitation contained in this section and in
addition to the powers which the Commissioner has under NRS 679B.230
to 679B.287 , inclusive, relating to the examination of
insurers, the Commissioner may order any insurer registered under NRS
692C.260 to 692C.350 , inclusive, to produce such records, books
or other information papers in its possession or in the possession of its
affiliates as may be necessary to ascertain the financial condition or
legality of conduct of such insurer. In the event such insurer fails to
comply with such order, the Commissioner may examine such affiliates to
obtain such information.
2. The Commissioner shall exercise his power under subsection 1
only if the examination of the insurer under NRS 679B.230 to 679B.287 , inclusive, is inadequate or the interests
of the policyholders of such insurer may be adversely affected.
3. The Commissioner may retain at the registered insurer’s expense
such attorneys, actuaries, accountants and other experts not otherwise a
part of the Commissioner’s staff as may be reasonably necessary to assist
in the conduct of the examination under subsection 1. Any persons so
retained shall be under the direction and control of the Commissioner and
shall act in a purely advisory capacity.
4. Each registered insurer producing for examination records,
books and papers pursuant to subsection 1 shall be liable for and shall
pay the expense of such examination in accordance with NRS 679B.290
.
(Added to NRS by 1973, 1047)
1. All information, documents and copies thereof obtained by or
disclosed to the Commissioner or any other person in the course of an
examination or investigation made pursuant to NRS 692C.410 , and all information reported pursuant to
NRS 692C.260 to 692C.350 , inclusive, must be given confidential
treatment and is not subject to subpoena and must not be made public by
the Commissioner or any other person, except to insurance departments of
other states, without the prior written consent of the insurer to which
it pertains unless the Commissioner, after giving the insurer and its
affiliates who would be affected thereby notice and an opportunity to be
heard, determines that the interests of policyholders, shareholders or
the public will be served by the publication thereof, in which event he
may publish all or any part thereof in any manner as he may deem
appropriate.
2. The Commissioner or any person who receives any documents,
materials or other information while acting under the authority of the
Commissioner must not be permitted or required to testify in a private
civil action concerning any information, document or copy thereof
specified in subsection 1.
3. The Commissioner may share or receive any information, document
or copy thereof specified in subsection 1 in accordance with NRS 679B.122
. The sharing or receipt of the
information, document or copy pursuant to this subsection does not waive
any applicable privilege or claim of confidentiality in the information,
document or copy.
(Added to NRS by 1973, 1048; A 2003, 3329 )
Whenever it appears to the
Commissioner that any insurer or any director, officer, employee or agent
thereof has committed or is about to commit a violation of this chapter
or of any rule, regulation, or order issued by the Commissioner
hereunder, the Commissioner may apply to the district court for the
county in which the principal office of the insurer is located or if such
insurer has no such office in this state, then to the First Judicial
District Court in and for Carson City for an order enjoining such insurer
or such director, officer, employee or agent thereof from violating or
continuing to violate this chapter or any such rule, regulation or order,
and for such other equitable relief as the nature of the case and the
interests of the insurer’s policyholders, creditors and shareholders or
the public may require.
(Added to NRS by 1973, 1048)
1. No security which is the subject of any agreement or
arrangement regarding acquisition, or which is acquired or to be
acquired, in contravention of the provisions of this chapter or of any
rule, regulation or order issued by the Commissioner hereunder may be
voted at any shareholders’ meeting, or may be counted for quorum
purposes, and any action of shareholders requiring the affirmative vote
of a percentage of shares may be taken as though such securities were not
issued and outstanding, but no action taken at any such meeting shall be
invalidated by the voting of such securities, unless the action would
materially affect control of the insurer or unless the courts of this
state have so ordered.
2. If an insurer or the Commissioner has reason to believe that
any security of the insurer has been or is about to be acquired in
contravention of the provisions of this chapter or of any rule,
regulation or order issued by the Commissioner hereunder the insurer or
the Commissioner may apply to the First Judicial District Court in and
for Carson City or to the district court for the county in which the
insurer has its principal place of business to enjoin any offer, request,
invitation, agreement, or acquisition made in contravention of NRS
692C.180 to 692C.250 , inclusive, or any rule, regulation or order
issued by the Commissioner thereunder to enjoin the voting of any
security so acquired, to void any vote of such security already cast at
any meeting of shareholders, and for such other equitable relief as the
nature of the case and the interests of the insurer’s policyholders,
creditors and shareholders or the public may require.
(Added to NRS by 1973, 1048)
In any case
where a person has acquired or is proposing to acquire any voting
securities in violation of this chapter or any rule, regulation or order
issued by the Commissioner hereunder, the First Judicial District Court
in and for Carson City or the district court of the county in which the
insurer has its principal place of business may, on such notice as the
court deems appropriate, upon the application of the insurer or the
Commissioner seize or sequester any voting securities of the insurer
owned directly or indirectly by such person, and issue such orders with
respect thereto as may be appropriate to effectuate the provisions of
this chapter. Notwithstanding any other provisions of law, for the
purposes of this chapter, the situs of the ownership of the securities of
domestic insurers shall be deemed to be in this state.
(Added to NRS by 1973, 1049)
Whenever it appears to the
Commissioner that any person has committed a violation of this chapter,
which so impairs the financial condition of a domestic insurer as to
threaten insolvency or make the further transaction of business by it
hazardous to its policyholders, creditors, shareholders or the public,
the Commissioner may proceed as provided in chapter 696B of NRS to take possession of the property of such
domestic insurer and to conduct the business thereof.
(Added to NRS by 1973, 1049)
Whenever it appears to the Commissioner that any person has committed a
violation of this chapter which makes the continued operation of an
insurer contrary to the interests of policyholders or the public, the
Commissioner may, after giving notice and an opportunity to be heard,
determine to suspend, revoke or refuse to renew such insurer’s license or
authority to do business in this state for such period as he finds is
required for the protection of policyholders or the public. Any such
determination shall be accompanied by specific findings of fact and
conclusions of law.
(Added to NRS by 1973, 1049)
1. Whenever it appears to the Commissioner that any insurer or any
director, officer, employee or agent thereof has committed a willful
violation of this chapter, the Commissioner may cause criminal
proceedings to be instituted in the county in which the principal office
of the insurer is located or if the insurer does not have such an office
in the state then in Carson City against that insurer or the responsible
director, officer, employee or agent thereof.
2. An insurer which willfully violates this chapter shall be
punished by a fine of not more than $20,000.
3. A natural person who willfully violates this chapter is guilty
of a category D felony and shall be punished as provided in NRS 193.130
.
(Added to NRS by 1973, 1049; A 1979, 1492; 1995, 1319)
1. A director or officer of an insurance holding company system
who knowingly violates, or knowingly participates in or assents to a
violation of, NRS 692C.350 , 692C.360
, 692C.363 or 692C.390 , or who knowingly permits any officer or
agent of the insurance holding company to engage in a transaction in
violation of NRS 692C.360 or 692C.363
or to pay a dividend or make an
extraordinary distribution in violation of NRS 692C.390 shall pay, after receiving notice and a
hearing before the Commissioner, a fine of not more than $10,000 for each
violation. In determining the amount of the fine, the Commissioner shall
consider the appropriateness of the fine in relation to:
(a) The gravity of the violation;
(b) The history of any previous violations committed by the
director or officer; and
(c) Any other matters as justice may require.
2. Whenever it appears to the Commissioner that an insurer or any
director, officer, employee or agent of the insurer has engaged in a
transaction or entered into a contract to which the provisions of NRS
692C.363 apply and for which the
insurer has not obtained the Commissioner’s approval, the Commissioner
may order the insurer to cease and desist immediately from engaging in
any further activity relating to the transaction or contract. In addition
to issuing such an order, the Commissioner may order the insurer to
rescind the contract and return each party to the contract to the
position he was in before the execution of the contract if the issuing of
the order is in the best interest of:
(a) The policyholders or creditors of the insurer; or
(b) The members of the general public.
(Added to NRS by 2003, 3321 )
1. Any person aggrieved by any act, determination, regulation,
order or any other action of the Commissioner pursuant to this chapter
may petition for review thereof in the district court in and for Carson
City. The court shall conduct its review without a jury and by trial de
novo, except that if all parties including the Commissioner so stipulate,
the review shall be confined to the record. Portions of the record may be
introduced by stipulation into evidence in a trial de novo as to those
parties so stipulating.
2. The filing of an appeal pursuant to this section shall stay the
application of any such regulation, order or other action of the
Commissioner to the appealing party unless the court, after giving such
party notice and an opportunity to be heard, determines that such a stay
would be detrimental to the interests of policyholders, shareholders,
creditors or the public.
3. Any person aggrieved by any failure of the Commissioner to act
or make a determination required by this chapter, may petition the
district court in and for Carson City for a writ of mandamus directing
the Commissioner to act or make such determination forthwith.
(Added to NRS by 1973, 1050; A 1977, 100)
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