USA Statutes : nevada
Title : Title 57 - INSURANCE
Chapter : CHAPTER 686B - RATES AND ESSENTIAL INSURANCE


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

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

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

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

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

      (d) Authorize cooperative action among insurers in the rate-making
process, and to regulate such cooperation in order to prevent practices
that tend to bring about monopoly or to lessen or destroy competition;

      (e) Encourage the most efficient and economic marketing practices;
and

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

      (Added to NRS by 1971, 1698; A 1985, 1067)
 As used in NRS 686B.010 to 686B.1799 , inclusive, unless the context otherwise
requires:

      1.  “Advisory organization,” except as limited by NRS 686B.1752
, means any person or organization
which is controlled by or composed of two or more insurers and which
engages in activities related to rate making. For the purposes of this
subsection, two or more insurers with common ownership or operating in
this State under common ownership constitute a single insurer. An
advisory organization does not include:

      (a) A joint underwriting association;

      (b) An actuarial or legal consultant; or

      (c) An employee or manager of an insurer.

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

      3.  “Rate service organization” means any person, other than an
employee of an insurer, who assists insurers in rate making or filing by:

      (a) Collecting, compiling and furnishing loss or expense statistics;

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

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

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

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


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

      (a) Ocean marine insurance;

      (b) Contracts issued by fraternal benefit societies;

      (c) Life insurance and credit life insurance;

      (d) Variable and fixed annuities;

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

      (f) Property insurance for business and commercial risks;

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

      (h) Surety insurance.

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

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


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

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

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


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

      2.  The Commissioner may disapprove rates if there is not a
reasonable degree of price competition at the consumer level with respect
to the class of business to which they apply. In determining whether a
reasonable degree of price competition exists, the Commissioner shall
consider all relevant tests, including:

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

      (b) The existence of differentials in rates in that class of
business;

      (c) Whether long-run profitability for insurers generally of the
class of business is unreasonably high in relation to its riskiness;

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

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

Ê If competition does not exist, rates are excessive if they are likely
to produce a long-run profit that is unreasonably high in relation to the
riskiness of the class of business, or if expenses are unreasonably high
in relation to the services rendered.

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

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

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

 In determining whether rates comply with the standards under NRS
686B.050 , the following criteria
shall be applied:

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

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

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

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

      (Added to NRS by 1971, 1700)


      1.  Every authorized insurer and every rate service organization
licensed under NRS 686B.140 which has
been designated by any insurer for the filing of rates under subsection 2
of NRS 686B.090 shall file with the
Commissioner all:

      (a) Rates and proposed increases thereto;

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

      (c) Supplementary rate information; and

      (d) Changes and amendments thereof,

Ê made by it for use in this state.

      2.  If an insurer makes a filing for a proposed increase in a rate
for insurance covering the liability of a practitioner licensed pursuant
to chapter 630 , 631 , 632 or 633 of NRS for a breach of his professional duty toward
a patient, the insurer shall not include in the filing any component that
is directly or indirectly related to the following:

      (a) Capital losses, diminished cash flow from any dividends,
interest or other investment returns, or any other financial loss that is
materially outside of the claims experience of the professional liability
insurance industry, as determined by the Commissioner.

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

Ê If the Commissioner determines that a filing includes any such
component, the Commissioner shall, pursuant to NRS 686B.110 , disapprove the proposed increase, in whole
or in part, to the extent that the proposed increase relies upon such a
component.

      (Added to NRS by 1971, 1700; A 1981, 698; 1987, 1533; 1989, 2176;
2003, 919 , 3352 )
 Each filing and any supporting information filed
under NRS 686B.010 to 686B.1799
, inclusive, must, as soon as filed,
be open to public inspection at any reasonable time. Copies may be
obtained by any person on request and upon payment of a reasonable charge
therefor.

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


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

      2.  An insurer may discharge its obligation under subsection 1 of
NRS 686B.070 by giving notice to the
Commissioner that it uses rates and supplementary rate information
prepared by a designated rate service organization, with such information
about modifications thereof as are necessary fully to inform the
Commissioner. The insurer’s rates and supplementary rate information
shall be deemed those filed from time to time by the rate service
organization, including any amendments thereto as filed, subject to the
modifications filed by the insurer.

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


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

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

      (b) Its interpretation of any statistical data relied upon;

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

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

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

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


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

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

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

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

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

Ê If the hearing is not held within the period specified in paragraph (a)
or (b), or if the Commissioner fails to issue an order concerning the
proposed rate for which the hearing is held within 45 days after the
hearing, the proposed rate shall be deemed approved.

      4.  The Commissioner shall by regulation specify the documents or
any other information which must be included in a proposal to increase or
decrease a rate submitted to him pursuant to subsection 1. Each such
proposal shall be deemed complete upon its filing with the Commissioner,
unless the Commissioner, within 15 business days after the proposal is
filed with him, determines that the proposal is incomplete because the
proposal does not comply with the regulations adopted by him pursuant to
this subsection.

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


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

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

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

      (a) The name and title of the person;

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

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

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

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

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

      (Added to NRS by 1987, 1532; A 1995, 1623; 2003, 921 )
 If a filing made
with the Commissioner pursuant to paragraph (a) of subsection 1 of NRS
686B.070 pertains to insurance
covering the liability of a practitioner licensed pursuant to chapter 630
, 631 , 632 or 633 of NRS for a
breach of his professional duty toward a patient, any interested person,
and any association of persons or organization whose members may be
affected, may intervene as a matter of right in any hearing or other
proceeding conducted to determine whether the applicable rate or proposed
increase thereto:

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

      2.  Should be approved or disapproved.

      (Added to NRS by 2003, 3351 )
 Each insurer shall notify its
policyholders, in a manner which the Commissioner shall prescribe by
regulation, if the policyholders’ premiums for insurance will be
materially increased or decreased because the zip code assigned to the
address of the policyholder is changed by the United States Postal
Service.

      (Added to NRS by 1991, 2117)
 No
insurer, organization or person licensed pursuant to this title may sell
or offer to sell any contract providing coverage for dental care at a
rate which is excessive for the benefits offered to the insured or
member. For the purpose of this section, a ratio of losses to premiums
collected which is less than 75 percent is presumed to show an excessive
rate.

      (Added to NRS by 1983, 2028)


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

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

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

[Effective until the date of repeal of the federal law requiring each
state to establish procedures for withholding, suspending and restricting
the professional, occupational and recreational licenses for child
support arrearages and for noncompliance with certain processes relating
to paternity or child support proceedings.]

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

      (a) A copy of its constitution, charter, articles of organization,
agreement, association or incorporation, and a copy of its bylaws, plan
of operation and any other rules or regulations governing the conduct of
its business;

      (b) A list of its membership and subscribers;

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

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

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

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

      (g) The applicable fee.

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

      3.  Every organization which has applied for a license pursuant to
subsection 1 shall thereafter promptly notify the Commissioner of every
material change in the facts or in the documents on which its application
was based.

      4.  If the Commissioner finds that the applicant and the natural
persons through whom it acts are competent, trustworthy and technically
qualified to provide the services proposed, and that all requirements of
law are met, he shall issue a license specifying the authorized activity
of the applicant. He shall not issue a license if the proposed activity
would tend to create a monopoly or to lessen or destroy competition in
prices.

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

      (a) If the licensee is a natural person who has been issued a
license as a rate service organization, submission of the statement
required pursuant to NRS 686B.143 and
payment of the applicable fee for renewal to the Commissioner on or
before the last day on which the license is renewable; or

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

      6.  A license which is not renewed annually expires on March 1. The
Commissioner may accept a request for renewal received by him within 30
days after the expiration of the license if the request is accompanied by:

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

      (b) If the licensee is a rate service organization that is not a
natural person or is an advisory organization, a fee for renewal of 150
percent of the fee otherwise required.

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

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

[Effective on the date of the repeal of the federal law requiring each
state to establish procedures for withholding, suspending and restricting
the professional, occupational and recreational licenses for child
support arrearages and for noncompliance with certain processes relating
to paternity or child support proceedings.]

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

      (a) A copy of its constitution, charter, articles of organization,
agreement, association or incorporation, and a copy of its bylaws, plan
of operation and any other rules or regulations governing the conduct of
its business;

      (b) A list of its membership and subscribers;

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

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

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

      (f) The applicable fee.

      2.  Every organization which has applied for a license pursuant to
subsection 1 shall thereafter promptly notify the Commissioner of every
material change in the facts or in the documents on which its application
was based.

      3.  If the Commissioner finds that the applicant and the natural
persons through whom it acts are competent, trustworthy and technically
qualified to provide the services proposed, and that all requirements of
law are met, he shall issue a license specifying the authorized activity
of the applicant. He shall not issue a license if the proposed activity
would tend to create a monopoly or to lessen or destroy competition in
prices.

      4.  A license issued pursuant to this section continues in effect
until the licensee leaves the state or until the license is suspended,
revoked or otherwise terminated. A license may be renewed by payment of
the applicable fee for renewal to the Commissioner on or before the last
day on which it is renewable.

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

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

      (Added to NRS by 1971, 1702; A 1987, 463; 1995, 2056; 1997, 2197,
2210, effective on the date of the repeal of the federal law requiring
each state to establish procedures for withholding, suspending and
restricting the professional, occupational and recreational licenses for
child support arrearages and for noncompliance with certain processes
relating to paternity or child support proceedings)
[Expires by
limitation on the date of the repeal of the federal law requiring each
state to establish procedures for withholding, suspending and restricting
the professional, occupational and recreational licenses for child
support arrearages and for noncompliance with certain processes relating
to paternity or child support proceedings.]

      1.  A natural person who applies for the issuance or renewal of a
license as a rate service organization shall submit to the Commissioner
the statement prescribed by the Division of Welfare and Supportive
Services of the Department of Health and Human Services pursuant to NRS
425.520 . The statement must be
completed and signed by the applicant.

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

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

      (b) A separate form prescribed by the Commissioner.

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

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

      (b) Indicates on the statement submitted pursuant to subsection 1
that he is subject to a court order for the support of a child and is not
in compliance with the order or a plan approved by the district attorney
or other public agency enforcing the order for the repayment of the
amount owed pursuant to the order.

      4.  If an applicant indicates on the statement submitted pursuant
to subsection 1 that he is subject to a court order for the support of a
child and is not in compliance with the order or a plan approved by the
district attorney or other public agency enforcing the order for the
repayment of the amount owed pursuant to the order, the Commissioner
shall advise the applicant to contact the district attorney or other
public agency enforcing the order to determine the actions that the
applicant may take to satisfy the arrearage.

      (Added to NRS by 1997, 2196)
[Expires by limitation on the date of the repeal of the federal
law requiring each state to establish procedures for withholding,
suspending and restricting the professional, occupational and
recreational licenses for child support arrearages and for noncompliance
with certain processes relating to paternity or child support
proceedings.]

      1.  If the Commissioner receives a copy of a court order issued
pursuant to NRS 425.540 that provides
for the suspension of all professional, occupational and recreational
licenses, certificates and permits issued to a person who is the holder
of a license as a rate service organization, the Commissioner shall deem
the license issued to that person to be suspended at the end of the 30th
day after the date on which the court order was issued unless the
Commissioner receives a letter issued to the holder of the license by the
district attorney or other public agency pursuant to NRS 425.550 stating that the holder of the license has
complied with the subpoena or warrant or has satisfied the arrearage
pursuant to NRS 425.560 .

      2.  The Commissioner shall reinstate a license as a rate service
organization that has been suspended by a district court pursuant to NRS
425.540 if the Commissioner receives a
letter issued by the district attorney or other public agency pursuant to
NRS 425.550 to the person whose license
was suspended stating that the person whose license was suspended has
complied with the subpoena or warrant or has satisfied the arrearage
pursuant to NRS 425.560 .

      (Added to NRS by 1997, 2196)
 No insurer shall
assume any obligation to any person other than a policyholder or other
companies under common control to use or adhere to certain rates or
rules, and no other person shall impose any penalty or other adverse
consequence for failure of an insurer to adhere to certain rates or rules.

      (Added to NRS by 1971, 1703)


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

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

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


      1.  Whenever he deems it necessary in order to inform himself about
any matter related to the enforcement of the insurance laws, the
Commissioner may examine the affairs and condition of any rate service
organization under subsection 1 of NRS 686B.130 . So far as reasonably necessary for an
examination pursuant to this subsection, the Commissioner may examine the
accounts, records, documents or evidences of transactions, so far as they
relate to the examinee, of any officer, manager, general agent, employee,
person who has executive authority over or is in charge of any segment of
the examinee’s affairs, person controlling or having a contract under
which he has the right to control the examinee whether exclusively or
with others, person who is under the control of the examinee, or any
person who is under the control of a person who controls or has a right
to control the examinee whether exclusively or with others. On demand
every examinee under this subsection shall make available to the
Commissioner for examination any of its own accounts, records, documents
or evidences of transactions and any of those of the persons listed in
this subsection.

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

      3.  In lieu of all or part of an examination conducted pursuant to
subsections 1 and 2, or in addition to it, the Commissioner may order an
independent audit by certified public accountants or actuarial evaluation
by actuaries approved by him of any person subject to the examination
requirement. Any accountant or actuary selected is subject to rules
respecting conflicts of interest promulgated by the Commissioner. Any
audit or evaluation conducted pursuant to this subsection is subject to
subsections 6 to 15, inclusive, so far as appropriate.

      4.  In lieu of all or part of an examination conducted pursuant to
this section, the Commissioner may accept the report of an audit already
made by certified public accountants or actuarial evaluation by actuaries
approved by him, or the report of an examination made by the insurance
department of another state.

      5.  An examination may cover comprehensively all aspects of the
examinee’s affairs and condition. The Commissioner shall determine the
exact nature and scope of each examination, and in doing so shall take
into account all relevant factors, including but not limited to the
length of time the examinee has been operating, the length of time he has
been licensed in this state, the nature of the services provided, the
nature of the accounting records available and the nature of examinations
performed elsewhere.

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

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

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

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

      10.  The examiner in charge of an examination shall make a proposed
report of the examination which must include such information and
analysis as is ordered in subsection 6, together with the examiner’s
recommendations. Preparation of the proposed report may include
conferences with the examinee or his representatives at the option of the
examiner in charge. The proposed report is confidential until filed in
accordance with subsection 11.

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

      12.  The Commissioner shall forward a copy of the examination
report to the examinee immediately upon adoption, except that if the
proposed report is adopted without change, the Commissioner need only so
notify the examinee.

      13.  The examinee shall forthwith furnish copies of the adopted
report to each member of its board of directors or other governing board.

      14.  The Commissioner may furnish, without cost or at a price to be
determined by him, a copy of the adopted report to the insurance
commissioner of each state in the United States and of each foreign
jurisdiction in which the examinee is licensed and to any other
interested person in this state or elsewhere.

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

      16.  The reasonable costs of an examination conducted pursuant to
this section must be paid by the examinee except as otherwise provided in
subsection 19. These costs include the salary and expenses of each
examiner and any other expenses which are directly apportioned to the
examination.

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

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

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

      20.  Deposits and payments made pursuant to subsections 16 to 19,
inclusive, shall not be deemed to be a tax or license fee within the
meaning of any statute. If any other state charges a per diem fee for
examination of examinees domiciled in this state, any examinee domiciled
in that other state shall pay the same fee when examined by the
Commissioner of Insurance of this state.

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


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

      2.  Rates used by an insurer shall not be deemed excessive because
they contain an amount reasonably calculated to recoup assessments made
under this section.

      (Added to NRS by 1971, 1707)—(Substituted in revision for NRS
686B.190)

Advisory Organization for Industrial Insurance
 As used in NRS 686B.1751 to 686B.1799 , inclusive, unless the context otherwise
requires, the words and terms defined in NRS 686B.1752 to 686B.1762 , inclusive, have the meanings ascribed to
them in those sections.

      (Added to NRS by 1995, 2049; A 1999, 2220 , 3381 ; 2001, 2256 )
 “Advisory
Organization,” when preceded by the definite article, means the
organization designated by the Commissioner pursuant to NRS 686B.1764
.

      (Added to NRS by 1995, 2049)
 “Basic premium rate”
means the portion of a rate attributable to the cost of losses per unit
of exposure and includes the expense of adjusting those losses.

      (Added to NRS by 1995, 2049)
 “Classification
of risks” or “classification” means the system or arrangement used to
recognize differences of exposure to hazards among employers with
different occupations, industries or operations.

      (Added to NRS by 1995, 2049)
 “Expenses” means the portion of
a rate attributable to the costs for the acquisition of employers to
insure, supervision of employees and agents, collection of accounts,
general expenses, taxes, licenses and fees.

      (Added to NRS by 1995, 2049)
 “Industrial
insurance” means insurance which provides the compensation required by
chapters 616A to 617 , inclusive, of NRS and employer’s liability
insurance provided in connection with that insurance.

      (Added to NRS by 1995, 2049)
 “Insurer” means any private
carrier authorized to provide industrial insurance in this state.

      (Added to NRS by 1995, 2049; A 1997, 1450; 1999, 444 , 1833 )
 “Plan for
rating experience” means a procedure used to predict the future losses of
an individual policyholder by measuring his past losses against the
losses of other policyholders in the same classification to determine any
prospective credit, debit or unitary modifications of premiums for the
individual policyholder.

      (Added to NRS by 1995, 2049)
 “Prospective loss
cost” means the portion of a rate that is based on historical aggregate
losses and loss adjustment expenses which are adjusted to their ultimate
value and projected to a future point in time. Except as otherwise
provided in this section, the term does not include provisions for
expenses or profit.

      (Added to NRS by 1999, 2219 )
 “Rate” means the cost of insurance
based on a unit of exposure to liability before any adjustments are made
for an individual employer’s losses, or expenses, or a combination of
both. The term does not include minimum premiums charged by an insurer.

      (Added to NRS by 1995, 2049)
 “Willful” or “willfully” in
relation to an act or omission which constitutes a violation of this
chapter means with actual knowledge or belief that the act or omission
constitutes a violation and with specific intent to commit the violation.

      (Added to NRS by 1995, 2049)


      1.  NRS 686B.1751 to 686B.1799
, inclusive, apply to insurers
providing industrial insurance and to the Advisory Organization
designated by the Commissioner. The Commissioner shall administer the
provisions of these sections.

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

      (Added to NRS by 1995, 2049)
 The Commissioner shall
designate one licensed advisory organization to act as his statistical
agent and to assist him in compiling relevant statistical information.
The designation must be made pursuant to reasonable competitive bidding
procedures established by the Commissioner. The Advisory Organization
shall:

      1.  Provide reliable statistics for industrial insurance.

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

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

      (Added to NRS by 1995, 2050)


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

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

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

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

      (Added to NRS by 1999, 3381 ; A 2001, 2256 )
 The Advisory Organization may:

      1.  Develop statistical plans including definitions for the
classification of risks.

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

      3.  Prepare and distribute data on prospective loss costs.

      4.  Prepare and distribute manuals of rules and schedules for
rating which do not permit calculating the final rates without using
information other than the information in the manual.

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

      6.  Conduct research and collect statistics to discover, identify
and classify information on the causes and prevention of losses.

      7.  Prepare and file forms and endorsements for policies and
consult with its members, subscribers and any other knowledgeable persons
on their use.

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

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

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

      11.  Calculate and provide to the insurer the modification of
premiums based on the individual employer’s losses.

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

      (Added to NRS by 1995, 2050; A 1997, 1450, 1451; 1999, 444 , 2220 , 2224 ; 2001, 154 )
 An advisory organization shall not:

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

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

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


      1.  The Uniform Plan for Rating Experience must:

      (a) Contain reasonable standards for eligibility in the Plan;

      (b) Provide adequate incentives for employers to prevent losses; and

      (c) Permit sufficient differences in an insurer’s premiums to
encourage safety at the employer’s place of business.

      2.  The Plan must be the exclusive basis for adjusting future
premiums by evaluating an individual employer’s characteristics which
tend to produce losses, but an insurer may file a rating plan that
provides for an adjustment of premiums retrospectively based on an
individual employer’s past experience of losses.

      (Added to NRS by 1995, 2051)


      1.  The Advisory Organization shall file with the Commissioner a
copy of every prospective loss cost, every manual of rating rules, every
rating schedule and every change, amendment or modification to them which
is proposed for use in this state at least 60 days before they are
distributed to the organization’s members, subscribers or other persons.
The rates shall be deemed to be approved unless they are disapproved by
the Commissioner within 60 days after they are filed.

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

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


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

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

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

      (a) Reflect the experience of the persons insured pursuant to the
plan to the extent that those rates are actuarially appropriate.

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

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

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


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

      2.  Any insurer may develop a subclassification or
subclassifications for the Uniform System of Classification. Any
subclassification must be filed with the Commissioner 60 days before it
becomes effective. The Commissioner shall disapprove the
subclassification if the insurer fails to show the data to be produced by
it will be consistent with the Uniform Statistical Plan and System of
Classification filed by the Advisory Organization with the Commissioner.

      (Added to NRS by 1995, 2051)


      1.  Every insurer shall:

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

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

      2.  No insurer may agree with another insurer or the Advisory
Organization to adhere to a manual of rules which is not reasonably
related to the recording or reporting of data according to the Uniform
Statistical Plan or Uniform System of Classifications filed by the
Advisory Organization.

      (Added to NRS by 1995, 2051)


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

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

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


      1.  Each insurer shall file with the Commissioner all the rates,
supplementary rate information, supporting data, and changes and
amendments thereof, except any information filed by the Advisory
Organization, which the insurer intends to use in this state. An insurer
may adopt by reference any supplementary rate information or supporting
data that has been previously filed by that insurer and approved by the
Commissioner. The filing must indicate the date the rates will become
effective. An insurer may file its rates pursuant to this subsection by
filing:

      (a) Final rates; or

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

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

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

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

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

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

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

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

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

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

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

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

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

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


      1.  If the Commissioner finds that:

      (a) The interaction among insurers is not competitive;

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

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

Ê the Commissioner may require the insurers to file information
supporting their existing rates. Before the Commissioner may disapprove
those rates, he shall notify the insurers and hold a hearing on the rates
and the supplementary rate information.

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

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


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

      2.  The Commissioner shall disapprove a rate if:

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

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

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

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

 If the Commissioner disapproves a rate, he shall issue a written order
stating the reasons for the disapproval and stating the date when the
rate must no longer be used for policies which are issued or renewed. The
date established by the Commissioner must be within a reasonable period
after the written order is issued. The Commissioner shall issue his order
within 30 days after the hearing. The Commissioner may require that the
premiums be adjusted after the date of the order for those policies in
effect on the date of his order.

      (Added to NRS by 1995, 2053)


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

      2.  A plan for the payment of dividends for industrial insurance
must be filed before there is a dividend payment. The plan shall be
deemed approved unless the Commissioner disapproves the plan within 30
days after it is filed and received by the Commissioner. An insurer shall
not condition the payment of a dividend upon the renewal of a policy or
contract by the policyholder, member or subscriber.

      3.  An insurer paying savings, unearned premium deposits or an
equivalent abatement for premiums allowed or returned for a policy of
industrial insurance must receive prior approval.

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


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

      2.  No insurer may agree to use any rate, rating plan or rating
rules, other than the uniform plan for rating experience, except as
necessary to comply with the provisions of this chapter concerning the
activity of the Advisory Organization and insurers relating to the
Uniform Statistical Plan, the Uniform Plan for Rating Experience and the
Uniform System of Classifications of Risks and the development of
subclassifications.

      3.  The fact that two or more insurers, whether or not they
subscribe to the Advisory Organization, use consistently or
intermittently the same rates, rating plans, rating schedules, rating
rules, classifications for rates, rules for underwriting, surveys,
inspections or similar materials does not require a finding by the
Commissioner that an agreement to restrain trade or lessen competition
exists.

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

      (Added to NRS by 1995, 2053)
 Every insurer, advisory organization and plan for
apportioned risks shall maintain records of the kind reasonably adapted
to its method of operation and reflecting its experience or the
experience of its members and the data or other information collected or
used by it. The Commissioner may examine those records at any reasonable
time to determine whether the activities of the insurer, advisory
organization or plan for apportioned risks comply with the provisions of
this chapter and chapters 616A to 617
, inclusive, of NRS. These records must be
maintained in an office in this state or must be made available to the
Commissioner for his examination or inspection at any time after
reasonable notice to the insurer, advisory organization or plan for
apportioned risks.

      (Added to NRS by 1995, 2054)


      1.  The Commissioner may examine any insurer, advisory organization
or plan for apportioned risks whenever he determines that such an
examination is necessary.

      2.  The reasonable cost of an examination must be paid by the
insurer or other person examined upon presentation by the Commissioner of
an accounting of those costs pursuant to NRS 679B.290 .

      3.  In lieu of an examination, the Commissioner may accept the
report of an examination made by the agency of another state that
regulates insurance.

      (Added to NRS by 1995, 2054; A 1999, 2223 )
 Any
person aggrieved by any decision, action or omission of the Advisory
Organization or an insurer regarding rates or other information filed
with the Commissioner may request in writing that the Organization or
insurer reconsider the decision, action or omission. Except as otherwise
provided in NRS 616B.772 , 616B.775
and 616B.787 , if the request for reconsideration is
rejected or is not acted upon within 30 days by the Organization or
insurer, the person requesting reconsideration may, within 30 days
thereafter, appeal from the decision, action or omission to the
Commissioner by filing a written complaint and request for a hearing
specifying the grounds relied upon.

      (Added to NRS by 1995, 2054; A 1999, 3381 ; 2001, 2256 )
 Any insurer or advisory organization, to which is
directed any order made or action taken by the Commissioner without a
hearing, may request a hearing before the Commissioner.

      (Added to NRS by 1995, 2054)
 A hearing required by
any of the provisions of NRS 686B.1751 to 686B.1799 , inclusive, is governed by NRS 679B.310
to 679B.370 , inclusive, except that any limits of time
imposed by NRS 686B.1751 to
686B.1799 , inclusive, control.

      (Added to NRS by 1995, 2054)
 The
Commissioner may, after notice and hearing, revoke or suspend the license
of an advisory organization for failure to comply with the provisions of
this chapter.

      (Added to NRS by 1995, 2055)


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

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

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

      (Added to NRS by 1995, 2055; A 1999, 2223 )
 An
insurer or other person shall not willfully withhold information from, or
knowingly give false or misleading information to, the Commissioner or to
the Advisory Organization, which will affect the rates, classifications
of risks or Uniform Statistical Plan for industrial insurance.

      (Added to NRS by 1995, 2055)
 No insurer or rating
organization or member thereof in its capacity as a member or officer or
employee of the licensed rating organization when acting within the scope
of his employment is liable for injury or death or other damage
proximately caused by a failure to inspect, or the manner or extent of
inspection of, an employer’s locations, plants or operations for
classification, control of losses or rating, or by that person’s comment
or failure to comment on the subject matter or object of the inspection.

      (Added to NRS by 1995, 2055)

ESSENTIAL INSURANCE

General Provisions


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

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

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

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

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

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

      3.  Each plan must require participation by all insurers doing any
business in this state of the kinds covered by the specific plan and all
agents licensed to represent such insurers in this state for the
specified kinds of business, except that the Commissioner may exclude
kinds of insurance, classes of insurers or classes of persons for
administrative convenience or because it is not equitable or practicable
to require them to participate in the plan.

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

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

      6.  In providing for the recoupment of deficits which may be
incurred in the plan, an option must be offered to an insured each policy
year to pay a capital stabilization charge which must not exceed 100
percent of the premium charged to the insured in that year. The
Commissioner shall determine the amount of the charge from appropriate
factors of loss experience and risk associated with the plan and the
insured. An insured who pays the stabilization charge must not be
required to pay any assessment to recoup a deficit in the plan incurred
in any policy year for which the charge is paid. The plan must provide
for the return to the insured of so much of his payment as remains after
all actual or potential liabilities under the policy have been discharged.

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

      8.  Every participating insurer and agent shall provide to any
person seeking coverages of kinds available in the plans the services
prescribed in the plans, including full information on the requirements
and procedures for obtaining coverage under the plans whenever the
business is not placed in the voluntary market.

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

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

      (Added to NRS by 1971, 1706; A 1975, 402; 1977, 303; 1985, 1069)
 There is
no liability on the part of, and no cause of action of any nature arises
against, the Commissioner or his representatives or any essential
insurance association, its agents or employees, under a plan established
pursuant to the provisions of NRS 686B.180 , for any good faith action taken by them in
the performance of their powers and duties under such plan.

      (Added to NRS by 1975, 403)
 Insurers doing
business within this state are authorized to prepare voluntary plans
providing any specified kind, line or class of insurance coverage or
subdivision or combination thereof for all or any part of this state in
which such insurance is not readily available in the voluntary market and
in which the public interest requires the availability of such coverage.
Such plans shall be submitted to the Commissioner and if approved by him
may be put into operation.

      (Added to NRS by 1971, 1707)

Associations


      1.  If after a hearing the Commissioner determines that a voluntary
or mandatory plan would, in his judgment, fail for any reason to provide
essential insurance coverage, he may, by regulation, establish a
nonprofit unincorporated legal entity to be known as the Nevada Essential
Insurance Association. All insurers required to participate pursuant to
subsection 3 of NRS 686B.180 shall
become members of the Association as a condition of their authority to
transact insurance in this state.

      2.  The Association shall perform its functions under a plan of
operation established by regulations promulgated by the Commissioner
pursuant to subsection 1 of NRS 686B.180 .

      (Added to NRS by 1975, 398)


      1.  The administrative powers of the Nevada Essential Insurance
Association shall be vested in a Board of Directors consisting of not
less than five nor more than nine members serving terms as established in
the plan of organization. The members of the Board shall be appointed by
the Commissioner with due consideration given to the composition of the
membership of the Association and to the interests of the insureds who
are provided essential insurance coverage by the Association.

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

      3.  The Board of Directors of the Association shall submit to the
Commissioner a plan of organization for the Association and make suitable
or necessary amendments thereto to assure the fair, reasonable and
equitable administration of the Association. The plan of operation shall
become effective upon approval in writing by the Commissioner.

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

      (Added to NRS by 1975, 398)


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

      2.  The Association may take any necessary action to make available
necessary insurance, including but not limited to, the following:

      (a) Assess participating insurers amounts necessary to pay the
obligations of the Association, administration expenses, the cost of
examinations conducted pursuant to NRS 687A.110 and other expenses authorized by this
chapter. The assessment of each member insurer for the kind or kinds of
insurance designated in the plan must be in the proportion that the net
direct written premiums of the member insurer for the preceding calendar
year bear to the net direct written premiums of all member insurers for
the preceding calendar year. A member insurer may not be assessed in any
year an amount greater than 5 percent of his net direct written premiums
for the preceding calendar year. Each member insurer must be allowed a
premium tax credit at the rate of 20 percent per year for 5 successive
years beginning on the first day of the calendar year after the calendar
year in which the insurer pays the assessment pursuant to this subsection.

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

      (c) Sue or be sued, including taking any legal action necessary to
recover any assessments for, on behalf of or against participating
carriers.

      (d) Investigate claims brought against the fund and adjust,
compromise, settle and pay covered claims to the extent of the
Association’s obligation and deny all other claims. Process claims
through its employees or through one or more member insurers or other
persons designated as servicing facilities. Designation of a service
facility is subject to the approval of the Commissioner, but such a
designation may be declined by a member insurer.

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

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

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

      (h) Pool risks among participating carriers.

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

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

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

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

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

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

      3.  In providing for the recoupment of a deficit of the
Association, an option must be offered to an insured each policy year to
pay a capital stabilization charge which must not exceed 100 percent of
the premium charged to the insured in that year. The Board of Directors
shall determine the amount of the charge from appropriate factors of loss
experience and risk associated with the Association and the insured. An
insured who pays the stabilization charge must not be required to pay any
assessment to recoup a deficit of the Association incurred in any policy
year for which the charge is paid. The Association’s plan of operation
must provide for the return to the insured of so much of his payment as
remains after all actual or potential liabilities under the policy have
been discharged.

      (Added to NRS by 1975, 398; A 1977, 305; 2003, 3305 )
 The Commissioner and the Nevada Essential
Insurance Association may:

      1.  Give consideration to the need for adequate and readily
accessible coverage, to alternative methods of improving the market
affected, to the preferences of the insurers and agents, to the inherent
limitations of the insurance mechanism, to the need for reasonable
underwriting standards and to the requirement of reasonable
loss-prevention measures.

      2.  Establish procedures that will create minimum interference with
the voluntary market.

      3.  Spread the burden imposed by the facility equitably and
efficiently.

      4.  Establish procedures for applicants and participants to have
grievances reviewed.

      5.  Take all reasonable and necessary steps to dissolve the
Association at the earliest date when essential insurance becomes readily
available in the private market. The dissolution of the Association,
including its assets and liabilities, must be accomplished under the
supervision of the Commissioner in an equitable and reasonable manner.
The dissolution must, if determined to be appropriate by the
Commissioner, provide for the repayment of any loans or other money
provided or contributed by the State of Nevada for the formation or
continuance of the Association.

      (Added to NRS by 1975, 399; A 2003, 3306 )
 There is no liability on the part of, and no cause of action
of any nature arises against, the Nevada Essential Insurance Association
or its agents or employees, members of the Board or the Commissioner or
his representatives for any good faith performance of their powers and
duties under NRS 686B.210 to 686B.240
, inclusive.

      (Added to NRS by 1975, 400)
 As used in NRS 686B.270 to
686B.320 , inclusive, unless the
context otherwise requires, “insured” means any person who has maintained
at least 1 year of coverage with an essential insurance association.

      (Added to NRS by 1981, 1021)
 The
provisions of NRS 81.130 and 81.510
do not apply to the conversion of an
essential insurance association to a domestic stock insurer as provided
in NRS 686B.280 to 686B.320 , inclusive.

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


      1.  An essential insurance association shall, whenever requested to
do so by the Commissioner, file a notice of intent to qualify as a
domestic stock insurer. In the absence of a request by the Commissioner,
an essential insurance association may file such a notice whenever it
considers it appropriate.

      2.  The notice must be filed with the Commissioner at least 4
months before the date the association is to become a domestic stock
insurer and must contain:

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

      (b) A valuation of capital and surplus according to both market and
amortized value based on the association’s annual financial statement for
the previous year;

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

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

      (Added to NRS by 1981, 1021)


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

      2.  Any participating insurer or insured may, within 30 days after
the date of the notice, apply to the Division for a hearing concerning
the association’s ability to qualify as a domestic insurer, the valuation
of capital and surplus, or the proposed number and distribution of shares
of stock.

      (Added to NRS by 1981, 1022; A 1991, 1630; 1993, 1917; 2003, 3307
)
 The association shall determine
the percentage of stock to which each insured is entitled as follows:

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

      (a) Insureds who have not paid a capital stabilization charge;

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

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

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

      3.  For each group in which an insured participated in any calendar
year, his number of insured months in that group is multiplied by the
amount of income per insured month attributable to that group, as
determined in subsection 2.

      4.  For each insured, the results of the calculations performed
under subsection 3 for each group in which the insured was a member
during a particular calendar year are added.

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

      6.  For each insured, the sum of the results of the calculations
performed under subsections 4 and 5 are divided by the total surplus of
the association as shown in its financial statement for the year
preceding its conversion to a domestic stock insurer, to obtain that
insured’s percentage of ownership of the total stock to be distributed.

      (Added to NRS by 1981, 1022)
 An association must comply with the provisions of NRS
680A.120 to qualify as a domestic
stock insurer. Any paid-in capital in excess of the minimum amount
required may be shown as surplus.

      (Added to NRS by 1981, 1023)
 Upon determining that the Association has
complied with NRS 686B.280 to
686B.310 , inclusive, and all other
requirements applicable to domestic stock insurers, the Commissioner may
issue to the Association a certificate of authority to transact business
as a domestic stock insurer.

      (Added to NRS by 1981, 1023; A 2003, 3307 )
 As used in NRS 686B.330 to 686B.370 , inclusive, unless the context otherwise
requires, “insured” has the meaning ascribed to it in NRS 686B.260 .

      (Added to NRS by 2003, 3303 )
130 and 81.510 .
 The provisions of NRS 81.130 and
81.510 do not apply to the conversion
of an essential insurance association to a domestic mutual insurer or a
domestic reciprocal insurer as provided in NRS 686B.330 to 686B.370 , inclusive.

      (Added to NRS by 2003, 3304 )


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

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

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

      (b) A valuation of the policyholder’s surplus according to both
market and amortized value based on the association’s annual financial
statement for the previous year; and

      (c) A provision for the return of any unused portion of the
insured’s capital stabilization charges.

      (Added to NRS by 2003, 3304 )


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

      2.  Any participating insurer or insured may, within 30 days after
the date of the notice, apply to the Division for a hearing concerning
the association’s ability to qualify as a domestic mutual insurer or
domestic reciprocal insurer.

      3.  An association must comply with the provisions of:

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

      (b) Chapter 694B of NRS, as
applicable to reciprocal insurers, to qualify as a domestic reciprocal
insurer.

      (Added to NRS by 2003, 3304 )
 Upon
determining that an association has complied with NRS 686B.330 to 686B.370 , inclusive, and all other requirements
applicable to domestic mutual insurers, if the association is qualifying
as a domestic mutual insurer, or to domestic reciprocal insurers, if the
association is qualifying as a domestic reciprocal insurer, the
Commissioner may issue to the association a certificate of authority to
transact business as a domestic mutual insurer or a domestic reciprocal
insurer.

      (Added to NRS by 2003, 3304 )