USA Statutes : nevada
Title : Title 57 - INSURANCE
Chapter : CHAPTER 696B - DELINQUENT INSURERS: CONSERVATION, REHABILITATION AND LIQUIDATION
This chapter constitutes and may be
cited as the Insurers Conservation, Rehabilitation and Liquidation Law.
(Added to NRS by 1971, 1883)
The applicable provisions
of this chapter apply to:
1. All insurers authorized to transact insurance in this state;
2. All insurers having policyholders resident in this state;
3. All insurers against whom a claim under an insurance contract
may arise in this state;
4. All persons in the process of organization, or holding
themselves out as organizing, or proposing to organize in this state for
the purpose of becoming an insurer; and
5. All other persons to whom such provisions are otherwise
expressly made applicable by law.
(Added to NRS by 1971, 1883; A 1995, 2167; 1997, 1455)
As used in this chapter, unless the
context otherwise requires, the words and terms defined in NRS 696B.040
to 696B.180 , inclusive, shall have the meanings ascribed
to them in NRS 696B.040 to 696B.180
, inclusive.
(Added to NRS by 1971, 1884)
“Ancillary state” means
any state other than a domiciliary state.
(Added to NRS by 1971, 1884)
“Creditor” means a person having
a claim, whether matured or unmatured, liquidated or unliquidated,
secured or unsecured, or absolute, fixed or contingent.
(Added to NRS by 1971, 1884)
“Delinquency
proceeding” means:
1. Any proceeding commenced against an insurer pursuant to this
chapter for the purpose of conserving, rehabilitating, reorganizing or
liquidating the insurer; or
2. The summary proceedings authorized by NRS 696B.500 to 696B.565 , inclusive.
(Added to NRS by 1971, 1884)
“Domiciliary state”
means the state in which an insurer is incorporated or organized or, as
to an alien insurer, the state in which at the commencement of
delinquency proceedings the larger amount of the insurer’s assets are
held in trust or on deposit for the benefit of policyholders and
creditors in the United States of America.
(Added to NRS by 1971, 1884)
“Foreign country” means
territory not in any state.
(Added to NRS by 1971, 1884)
1. “General assets” means all property, real, personal or
otherwise, not specifically mortgaged, pledged, deposited or otherwise
encumbered for the security or benefit of specified persons or a limited
class or classes of persons, and as to such specifically encumbered
property the term includes all such property or its proceeds in excess of
the amount necessary to discharge the sums secured thereby.
2. Assets held in trust or on deposit for the security or benefit
of all policyholders or all policyholders and creditors in the United
States of America are deemed general assets.
(Added to NRS by 1971, 1884)
“Impairment” exists as to:
1. A stock insurer when the insurer’s assets do not at least equal
the sum of its liabilities, including also its paid-in capital stock
account and the minimum surplus required to be maintained under this Code
for authority to transact the kinds of insurance transacted.
2. A mutual insurer when the insurer’s assets do not at least
equal the sum of the insurer’s liabilities and the minimum surplus
required under this Code to be maintained for authority to transact the
kinds of insurance transacted.
(Added to NRS by 1971, 1885)
“Insolvency” exists:
1. When the insurer fails to meet its obligations as they mature;
2. When a stock insurer’s assets are less than the sum of its
liabilities and its paid-in capital stock account;
3. When a mutual insurer’s assets are less than the sum of its
liabilities and the minimum basic surplus required to be maintained by
the insurer under this Code for authority to transact the kinds of
insurance transacted; or
4. As otherwise expressly provided in this Code.
(Added to NRS by 1971, 1885)
“Insurer,” in addition to persons
so defined under NRS 679A.100 ,
includes also persons purporting to be insurers, or organizing or holding
themselves out as organizing in this state for the purpose of becoming
insurers.
(Added to NRS by 1971, 1885)
“Preferred claim” means
any claim accorded priority of payment from the insurer’s general assets
under applicable law.
(Added to NRS by 1971, 1885)
“Receiver” means a receiver,
liquidator, rehabilitator or conservator, as the context requires.
(Added to NRS by 1971, 1885)
“Reciprocal state” means
any state other than this state in which in substance and effect the
provisions of the Uniform Insurers Liquidation Act, are in force,
including provisions requiring that the commissioner of insurance or the
equivalent insurance supervisory officer be the receiver of a delinquent
insurer, and in which effective provisions exist for avoidance of
fraudulent conveyances and unlawful preferential transfers.
(Added to NRS by 1971, 1885)
1. “Secured claim” means any claim secured by mortgage, trust
deed, pledge, deposit as security, escrow or otherwise, but not including
special deposit claims or claims against general assets.
2. “Secured claim” includes claims which have become liens upon
specific assets through judicial process and not invalidated.
(Added to NRS by 1971, 1886)
“Special deposit
claim” means any claim secured by a deposit made under a statute for the
security or benefit of a limited class or classes of persons, but not
including any general assets.
(Added to NRS by 1971, 1886)
“State” has the meaning ascribed to
it in NRS 679A.120 .
(Added to NRS by 1971, 1886)
1. The district court has original jurisdiction of delinquency
proceedings under NRS 696B.010 to
696B.565 , inclusive, and any court
with jurisdiction may make all necessary or proper orders to carry out
the purposes of those sections.
2. The venue of delinquency proceedings against a domestic insurer
must be in the county in this state of the insurer’s principal place of
business or, if the principal place of business is located in another
state, in any county in this state selected by the Commissioner for the
purpose. The venue of proceedings against foreign insurers must be in any
county in this state selected by the Commissioner for the purpose.
3. At any time after commencement of a proceeding, the
Commissioner or any other party may apply to the court for an order
changing the venue of, and removing, the proceeding to any other county
of this state in which the proceeding may most conveniently, economically
and efficiently be conducted.
4. No court has jurisdiction to entertain, hear or determine any
petition or complaint praying for the dissolution, liquidation,
rehabilitation, sequestration, conservation or receivership of any
insurer, or for an injunction or restraining order or other relief
preliminary, incidental or relating to such proceedings, other than in
accordance with NRS 696B.010 to
696B.565 , inclusive.
5. An appeal to the Supreme Court may be taken from any court
granting or refusing rehabilitation, liquidation, conservation or
receivership, and from every order in delinquency proceedings having the
character of a final order as to the particular portion of the
proceedings embraced therein.
(Added to NRS by 1971, 1886; A 1995, 1635; 1997, 3037)
1. A court of this state in which an order of rehabilitation or
liquidation has been entered in delinquency proceedings against a
domestic insurer or alien insurer domiciled in this state, has
jurisdiction also over persons, served as provided in subsection 2, in an
action brought by the insurer’s receiver on or arising out of such
obligation or relationship, as follows:
(a) Persons obligated to the insurer as a result of agency or
brokerage or transactions between such persons and the insurer;
(b) Reinsurers of the insurer and their representatives; and
(c) Past or present officers, managers, trustees, directors,
organizers and promoters of the insurer, and other persons in positions
of similar responsibility with the insurer.
2. As to those of such persons who are in this state, personal
service of process shall be made as in other civil actions. As to those
of such persons who cannot be found in this state at the time process is
to be served, personal service of process shall be made thereon by a
public officer of the jurisdiction in which such person may be found, in
the same manner as personal service of process is required to be made
within this state under the Nevada Rules of Civil Procedure; and the
affidavit or certificate under oath setting forth the facts of such
service shall be filed in the court in this state in which the action is
pending.
(Added to NRS by 1971, 1887)
The Commissioner may
petition for an order directing him to conserve the assets of or to
rehabilitate a domestic insurer or an alien insurer domiciled in this
state on any one or more of the following grounds:
1. On any ground for liquidation of the insurer under NRS 696B.220
, if the Commissioner believes
conservation or rehabilitation possible without substantial increase of
risk to creditors, policyholders or the public;
2. If the insurer is in unsound condition, or is using, or has
been subject to such methods and practices in the conduct of its business
as to render its further transaction of insurance presently or
prospectively hazardous to its policyholders, or creditors, or the public;
3. If the insurer’s solvency is endangered by illegal action;
4. For material falsification of the insurer’s records, reports or
financial condition;
5. If the Commissioner finds after hearing that any individual
exercising executive power with respect to or otherwise materially
influencing or controlling the insurer, directly or indirectly, is
dishonest or untrustworthy in matters affecting the insurer, and has not
been or cannot effectively and permanently be removed from such power,
influence or control;
6. For unlawful concealment or removal by the insurer of any of
its records or assets;
7. For failure of the insurer, or its parent corporation, or
subsidiary or affiliated person controlled by the insurer, to submit its
books, accounts, records and affairs to the reasonable inspection or
examination of the Commissioner or his examiner as authorized under this
Code;
8. If any individual exercising any executive authority in the
affairs of the insurer, or parent corporation, or subsidiary or
affiliated person has refused to be examined under oath, by the
Commissioner or his examiner thereunto duly authorized, whether within
this state or otherwise, concerning the pertinent affairs of the insurer,
or parent corporation, or subsidiary, or affiliated person, or if
examined under oath refuses to divulge pertinent information reasonably
known to him;
9. For failure of officers, employees and other representatives of
the insurer, or parent corporation, or subsidiary, or affiliated person
to comply promptly with the reasonable requests of the Commissioner or
his examiner for the purposes of and during the conduct of any
examination;
10. That a deadlock exists in the insurer’s board of directors
relative to the general management of the insurer’s affairs, that the
insurer’s stockholders or members (as to a mutual insurer) are unable to
break the deadlock, and that the same threatens irreparable injury to the
insurer, or its creditors, or its policyholders, or to the public;
11. If the insurer has transferred or attempted to transfer
substantially its entire property or business, or has entered into any
transaction the effect of which is to merge or consolidate substantially
its entire property or business in that of any other insurer, without
first having obtained the written approval of the Commissioner as
required under this Code;
12. If the controlling stock of the insurer has been transferred
to others without compliance with the requirements of NRS 693A.320 (transfer of controlling stock), except
where such transfer is by testamentary bequest or inheritance;
13. If the insurer has willfully violated its charter or a law of
this state, or has willfully exceeded its corporate powers;
14. If the insurer has requested or consented to conservation or
rehabilitation by a vote or written authorization of a majority of its
directors, or stockholders, or members (as to mutual insurers); or
15. If the insurer has failed to pay any valid judgment against it
within 30 days after the judgment became final.
(Added to NRS by 1971, 1887)
The Commissioner may apply to the court for an
order appointing him as receiver (if his appointment as receiver is not
then in effect) and directing him to liquidate the business of a domestic
insurer or of the United States branch of an alien insurer having
trusteed assets in this state, whether or not there has been a prior
order directing him to conserve or rehabilitate the insurer, upon any one
or more of the following grounds:
1. That the insurer has failed to cure an impairment of surplus,
or capital, or assets within the time allowed therefor by any lawful
order of the Commissioner;
2. That the insurer is insolvent, or has commenced voluntary
liquidation or dissolution, or attempts to commence or prosecute or is
the object, in this state or elsewhere, of any action or proceeding to
liquidate its business or affairs, or to dissolve its corporate charter,
or to procure the appointment of a receiver, trustee, custodian or
sequestrator under any law except this Code. This subsection does not
apply to the conversion of a stock insurer to an ordinary business
corporation as authorized under NRS 693A.300 , or to voluntary dissolution of the insurer
pursuant to NRS 692B.250 ;
3. That the insurer has ceased for a period of 1 year to transact
insurance business;
4. If a proposed insurer has not completed its organization and
obtained a certificate of authority as an insurer within the time allowed
therefor under any applicable solicitation permit issued by the
Commissioner;
5. That efforts to rehabilitate the insurer and remove the causes
or adverse effects thereof for which rehabilitation was instituted have
failed despite all reasonable efforts by the Commissioner, or cannot be
continued without material increase of risk of loss to the insurer’s
creditors or policyholders; or
6. If the insurer has requested or consented to liquidation by a
vote or written authorization of a majority of its directors, or
stockholders, or members (if a mutual insurer).
(Added to NRS by 1971, 1888)
The Commissioner may apply to the court for an order appointing him as
receiver or ancillary receiver, and directing him to conserve the assets
within this state, of a foreign or alien insurer:
1. Upon any of the applicable grounds specified in NRS 696B.210
or 696B.220 ;
2. Upon the ground that the insurer’s property has been
sequestrated in its domiciliary sovereignty or in any other sovereignty;
or
3. In the case of an alien insurer, upon the ground that the
insurer has failed to make good an impairment of its trusteed funds
within the time required therefor by order of the Commissioner.
(Added to NRS by 1971, 1889)
The Commissioner may apply to the court for an order
appointing him as ancillary receiver of and directing him to liquidate
the business of a foreign or alien insurer having assets, business or
claims in this state upon the appointment in the domiciliary sovereignty
of such insurer of a receiver, liquidator, conservator, rehabilitator or
other officer by whatever name called for the purpose of liquidating the
business of the insurer.
(Added to NRS by 1971, 1889)
1. The Commissioner shall commence a delinquency proceeding
authorized under this chapter, the Attorney General representing him, by
filing a petition in a court of proper jurisdiction praying for
appointment of the Commissioner as receiver of the insurer.
2. Upon the filing of the petition the court shall issue an order
directing the insurer to appear in court on the day fixed in the order
and show cause why the petition should not be granted. Unless good cause
is shown for a shorter period, the order shall require the insurer so to
show cause not less than 15 days nor more than 30 days from the date of
the order.
3. The order to show cause and service thereof on the insurer
shall constitute due and legal process and shall be in lieu of any other
process otherwise provided by law or court rule.
(Added to NRS by 1971, 1890)
1. The Commissioner, as receiver, rehabilitator or liquidator, may
appoint one or more special deputies who have all the powers and
responsibilities of a receiver, rehabilitator or liquidator, and the
Commissioner may employ such counsels, clerks and assistants as he
considers necessary. The compensation of such special deputies, counsels,
clerks and assistants and all expenses of taking possession of the
insurer and of conducting the proceedings must be fixed by the
Commissioner with the approval of the court, and paid out of the money or
other assets of the insurer. The persons appointed pursuant to this
section serve at the pleasure of the Commissioner. The Commissioner, as
receiver, rehabilitator or liquidator, may, with the approval of the
court, appoint an advisory committee of policyholders, claimants or other
creditors, including guaranty associations, if he considers such a
committee necessary. The committee serves at the pleasure of the
Commissioner and serves without compensation other than reimbursement for
reasonable travel and other expenses. No other committee of any nature
may be appointed by the Commissioner or the court in proceedings for
receivership, rehabilitation or liquidation conducted pursuant to this
chapter.
2. If the property of the insurer does not contain sufficient cash
or liquid assets to defray the costs incurred, the Commissioner may
advance the costs so incurred out of any appropriation for the
maintenance of the Division. Any amounts so advanced for expenses of
administration must be repaid to the Commissioner out of the first
available money of the insurer.
(Added to NRS by 1995, 1634)
A certified copy of any order to
show cause issued under NRS 696B.250 ,
and a copy of the petition upon which the order is made shall be served
upon the insurer by delivering the same to its president, vice president,
secretary, treasurer, director, resident agent for service of process, or
to its managing agent, or attorney-in-fact (if a reciprocal insurer). If
no such officer or functionary can readily be found in this state, then
such process may be served upon the insurer by service thereof upon the
Commissioner pursuant to NRS 680A.250
and 680A.260 , and in which case the
additional 10 days provided by subsection 3 of NRS 680A.260 shall not apply.
(Added to NRS by 1971, 1890)
1. Upon application by the Commissioner for such an order to show
cause, or at any time thereafter, the court may without notice issue an
injunction restraining the insurer, its officers, directors,
stockholders, members, subscribers, agents and all other persons from the
transaction of its business or the waste or disposition of its property
until the further order of the court, but the court shall so frame its
injunction as not to prevent the Nevada Life and Health Insurance
Guaranty Association and the Nevada Insurance Guaranty Association from
exercising their respective powers under this title.
2. The court may at any time during a proceeding under NRS
696B.010 to 696B.565 , inclusive, issue such other injunctions or
orders as may be deemed necessary to prevent interference with the
Commissioner or the proceeding, or waste of the assets of the insurer, or
the commencement or prosecution of any actions, or the obtaining of
preferences, judgments, attachments or other liens, or the making of any
levy against the insurer or against its assets or any part thereof.
3. No bond may be required of the Commissioner as a prerequisite
for the issuance of any injunction or restraining order pursuant to this
section.
(Added to NRS by 1971, 1890; A 1991, 883)
1. This section, NRS 696B.030
to 696B.180 , inclusive, (definitions)
and NRS 696B.290 to 696B.340 , inclusive, comprise and may be cited as the
Uniform Insurers Liquidation Act.
2. If any provision of the Uniform Insurers Liquidation Act or the
application thereof to any person or circumstances is held invalid, such
invalidity shall not affect other provisions or applications of the act
which can be given effect without the invalid provision or application,
and to this end the provisions of the act are declared to be severable.
3. The Uniform Insurers Liquidation Act shall be so interpreted as
to effectuate its general purpose to make uniform the laws of those
states which enact it. To the extent that its provisions, when
applicable, conflict with other provisions of this Code, the provisions
of the Uniform Insurers Liquidation Act shall control.
(Added to NRS by 1971, 1891)
1. Whenever under this chapter a receiver is to be appointed in
delinquency proceedings for an insurer, the court shall appoint the
commissioner as such receiver. The court shall order the commissioner
forthwith to take possession of the assets of the insurer and to
administer the assets under the orders of the court.
2. As a domiciliary receiver, the commissioner shall be vested by
operation of law with the title to all of the property, contracts and
rights of action, and all of the books and records of the insurer,
wherever located, as of the date of entry of the order directing him to
conserve, rehabilitate or liquidate a domestic insurer or to liquidate
the United States branch of an alien insurer domiciled in this state, and
he shall have the right to recover the same and reduce the same to
possession; but ancillary receivers in reciprocal states shall have, as
to assets located in their respective states, the rights and powers which
are prescribed in this chapter for ancillary receivers appointed in this
state as to assets located in this state.
3. The filing or recording of the order directing possession to be
taken, or a certified copy thereof, in any office where instruments
affecting title to property are required to be filed or recorded shall
impart the same notice as would be imparted by a deed, bill of sale or
other evidence of title duly filed or recorded.
4. The Commissioner as domiciliary receiver shall be responsible
for the proper administration of all assets coming into his possession or
control. The court may at any time require a bond from him or his
deputies if deemed desirable for the protection of such assets.
5. Upon taking possession of the assets of an insurer, the
domiciliary receiver shall immediately proceed to conduct the business of
the insurer or to take such steps as are authorized by this chapter for
the purpose of rehabilitating, liquidating or conserving the affairs or
assets of the insurer.
6. In connection with delinquency proceedings, the Commissioner
may appoint one or more special deputy commissioners to act for him and
he may employ such counsel, clerks and assistants as he deems necessary.
The compensation of the special deputies, counsel, clerks or assistants
and all expenses of taking possession of the insurer and of conducting
the proceedings shall be fixed by the receiver and shall be paid out of
the funds or assets of the insurer. Within the limits of duties imposed
upon them, special deputies shall possess all the powers given to and, in
the exercise of those powers, shall be subject to all of the duties
imposed upon the receiver with respect to such proceedings.
7. During such receivership the Commissioner shall file in the
court, at regular intervals not less frequently than quarterly, his true
reports in summary form of the insurer’s affairs under the receivership,
and of progress being made in accomplishing the objectives of the
receivership. All such reports, together with such additional or special
reports as the court may reasonably require, shall be subject to review
by the court; and all actions of the receiver therein reported shall be
subject to the court’s approval, but the court shall not withhold
approval or disapprove any such action unless found by the court after a
hearing thereon in open court to be unlawful, arbitrary or capricious.
(Added to NRS by 1971, 1891)
1. Whenever under this chapter an ancillary receiver is to be
appointed in delinquency proceedings for an insurer not domiciled in this
State, the court shall appoint the Commissioner as ancillary receiver.
The Commissioner shall file a petition requesting the appointment on the
grounds set forth in NRS 696B.230 or
696B.240 :
(a) If he finds that there are sufficient assets of the insurer
located in this State to justify the appointment of an ancillary
receiver; or
(b) If 10 or more persons resident in this State having claims
against such insurer file a petition with the Commissioner requesting the
appointment of such ancillary receiver.
2. The domiciliary receiver for the purpose of liquidating an
insurer domiciled in a reciprocal state shall be vested by operation of
law with the title to all of the property, contracts and rights of
action, and all of the books and records of the insurer located in this
State, and he shall have the immediate right to recover balances due from
local agents and to obtain possession of any books and records of the
insurer found in this State. He shall also be entitled to recover the
other assets of the insurer located in this State, except that upon the
appointment of an ancillary receiver in this State, the ancillary
receiver shall during the ancillary receivership proceedings have the
sole right to recover such other assets. The ancillary receiver shall, as
soon as practicable, liquidate from their respective securities those
special deposit claims and secured claims which are proved and allowed in
the ancillary proceedings in this State, and shall pay the necessary
expenses of the proceedings. All remaining assets he shall promptly
transfer to the domiciliary receiver. Subject to the provisions of this
section, the ancillary receiver and his deputies shall have the same
powers and be subject to the same duties with respect to the
administration of such assets as a receiver of an insurer domiciled in
this State.
3. The domiciliary receiver of an insurer domiciled in a
reciprocal state may sue in this State to recover any assets of such
insurer to which he may be entitled under the laws of this State.
(Added to NRS by 1971, 1892)
1. In a delinquency proceeding begun in this state against a
domestic insurer, claimants residing in reciprocal states may file claims
either with the ancillary receivers, if any, in their respective states,
or with the domiciliary receiver. All such claims must be filed on or
before the last date fixed for the filing of claims in the domiciliary
delinquency proceedings.
2. Controverted claims belonging to claimants residing in
reciprocal states may either:
(a) Be proved in this state; or
(b) If ancillary proceedings have been commenced in such reciprocal
states, be proved in those proceedings. If a claimant elects to prove his
claim in ancillary proceedings and if notice of the claim and opportunity
to appear and be heard is afforded the domiciliary receiver of this
state, as provided in NRS 696B.320
with respect to ancillary proceedings in this state, the final allowance
of such claim by the courts in the ancillary state shall be accepted in
this state as conclusive as to its amount and shall also be accepted as
conclusive as to its priority, if any, against special deposits or other
security located within the ancillary state.
(Added to NRS by 1971, 1893)
1. In a delinquency proceeding in a reciprocal state against an
insurer domiciled in that state, claimants against such insurer who
reside within this state may file claims either with the ancillary
receiver, if any, appointed in this state, or with the domiciliary
receiver. All such claims must be filed on or before the last date fixed
for the filing of claims in the domiciliary delinquency proceedings.
2. Controverted claims belonging to claimants residing in this
state may either:
(a) Be proved in the domiciliary state as provided by the law of
that state; or
(b) If ancillary proceedings have been commenced in this state, be
proved in those proceedings. If any such claimant elects to prove his
claim in this state, he shall file his claim with the ancillary receiver
and shall give notice in writing to the receiver in the domiciliary
state, either by registered or certified mail or by personal service at
least 40 days prior to the date set for hearing. The notice shall contain
a concise statement of the amount of the claim, the facts on which the
claim is based, and the priorities asserted, if any. If the domiciliary
receiver within 30 days after the giving of such notice gives notice in
writing to the ancillary receiver and to the claimant, either by
registered or certified mail or by personal service, of his intention to
contest such claim, he shall be entitled to appear or to be represented
in any proceeding in this state involving adjudication of the claim. The
final allowance of the claim by the courts of this state shall be
accepted as conclusive as to its amount and shall also be accepted as
conclusive as to its priority, if any, against special deposits or other
security located within this state.
(Added to NRS by 1971, 1893)
1. All claims against an insurer against which delinquency
proceedings have been begun shall set forth in reasonable detail the
amount of the claim, or the basis upon which such amount can be
ascertained, the facts upon which the claim is based, and the priorities
asserted, if any. All such claims shall be verified by the affidavit of
the claimant, or someone authorized to act on his behalf and having
knowledge of the facts, and shall be supported by such documents as may
be material thereto.
2. All claims filed in this state shall be filed with the
receiver, whether domiciliary or ancillary, in this state, on or before
the last date for filing as specified in this chapter.
3. Within 10 days of the receipt of any claim, or within such
further period as the court may fix for good cause shown, the receiver
shall report the claim to the court, specifying in such report his
recommendation with respect to the action to be taken thereon. Upon
receipt of such report, the court shall fix a time for hearing the claim
and shall direct that the claimant or the receiver, as the court shall
specify, shall give such notice as the court determines to such persons
as appear to the court to be interested therein. All such notices shall
specify the time and place of the hearing and shall concisely state the
amount and nature of the claim, the priorities asserted, if any, and the
recommendation of the receiver with reference thereto.
4. At the hearing, all persons interested shall be entitled to
appear, and the court shall enter an order allowing, allowing in part, or
disallowing the claim. Any such order is an appealable order.
(Added to NRS by 1971, 1894)
During the pendency of delinquency proceedings in this or any reciprocal
state, no action or proceeding in the nature of an attachment,
garnishment or execution shall be commenced or maintained in the courts
of this state against the delinquent insurer or its assets. Any lien
obtained by any such action or proceeding within 4 months prior to the
commencement of any such delinquency proceedings or at any time
thereafter is void as against any rights arising in such delinquency
proceedings.
(Added to NRS by 1971, 1894)
1. Except as provided in subsection 2, no order, judgment or
decree enjoining, restraining or interfering with the prosecution of the
business of any insurer or for the appointment of a temporary or
permanent receiver of a domestic insurer shall be made or granted
otherwise than upon the petition of the Commissioner represented by the
Attorney General as provided in this chapter.
2. A judgment creditor may commence an action for the enforcement
and protection of his judgment or institute proceedings supplementary to
execution against any such debtor insurer, giving 30 days’ notice to the
Commissioner of his intention so to do, and in any such action or
proceeding the court may, subject to NRS 696B.340 , appoint a receiver for the purposes thereof
as the court may deem necessary.
(Added to NRS by 1971, 1895)
1. Except as otherwise provided in this section:
(a) The money collected by the Commissioner in a proceeding under
this chapter must be from time to time deposited in one or more state or
national banks, savings banks, credit unions or trust companies, and in
the case of the insolvency or voluntary or involuntary liquidation of any
such depositary which is an institution organized and supervised under
the laws of this state, such deposits are entitled to priority of payment
on an equality with any other priority given by the banking laws of this
state.
(b) The Commissioner may deposit the money or any part thereof in a
national bank, credit union or trust company as a trust fund.
2. The Commissioner shall deposit in the State Insurance Fund any
money collected in a proceeding under this chapter that is required to be
held in trust by a successor organization of the State Industrial
Insurance System by NRS 616B.042 . The
money must be used by the Commissioner for the payment of claims made
against the successor organization under a policy of industrial insurance
issued by that organization, and any administration costs and expenses
related thereto. The payment of the claims must be made in accordance
with the provisions of this chapter.
(Added to NRS by 1971, 1895; A 1999, 1555 , 1834 )
The Commissioner shall not be
required to pay any fee to any public officer in this state for service
of process, or for filing, recording, issuing a transcript or certificate
or authenticating any paper or instrument pertaining to the exercise by
the Commissioner of any of the powers or duties conferred upon him under
this chapter, whether or not such paper or instrument is executed by the
Commissioner or his deputies, employees or attorneys of record and
whether or not it is connected with the commencement of any action or
proceeding by or against the Commissioner, or with the subsequent conduct
of such action or proceeding.
(Added to NRS by 1971, 1895)
1. For the purpose of facilitating the rehabilitation,
liquidation, conservation or dissolution of an insurer pursuant to NRS
696B.010 to 696B.565 , inclusive, the Commissioner may, subject to
the approval of the court, borrow money and execute, acknowledge and
deliver notes or other evidences of indebtedness therefor and secure the
repayment of the same by the mortgage, pledge, assignment, transfer in
trust or hypothecation of any or all of the property, whether real,
personal or mixed, of such insurer, and the Commissioner, subject to the
approval of the court, shall have power to take any and all other action
necessary and proper to consummate any such loan and to provide for the
repayment thereof.
2. The Commissioner shall be under no obligation personally or in
his official capacity to repay any loan made pursuant to this section.
(Added to NRS by 1971, 1895)
If at
any time the court finds, after a hearing in open court, upon petition of
the Commissioner or of the insurer or of its own motion, that the
objectives of an order to conserve or rehabilitate a domestic insurer or
an alien insurer domiciled in this state have been accomplished, and that
the insurer can be returned to its own management without further
jeopardy to the insurer and its creditors or policyholders or
stockholders or to the public, the court may, upon a full report and
accounting by the Commissioner relative to the conduct of the insurer’s
affairs during the conservation or rehabilitation and of the insurer’s
current financial condition, terminate the conservation or rehabilitation
and by order return the insurer, its assets and affairs, to the insurer’s
management.
(Added to NRS by 1971, 1896)
The rights and
liabilities of the insurer and of its creditors, policyholders,
stockholders, members, subscribers and all other persons interested in
its estate shall, unless otherwise directed by the court, be fixed as of
the date on which the order directing the liquidation of the insurer is
filed in the office of the clerk of the court which made the order,
subject to the provisions of this chapter with respect to the rights of
claimants holding contingent claims.
(Added to NRS by 1971, 1896)
1. No insurer shall make any transfer of or create any lien upon
any of its property with the intent of giving to or enabling any creditor
or policyholder to obtain a greater percentage of his debt than any other
creditor or policyholder of the same class.
2. Any transfer of, or lien upon, any property of any insurer made
or created within 4 months prior to the filing of a petition for an order
to show cause under this chapter, which gives to any creditor or
policyholder or enables him to obtain a greater percentage of his debt
than any other creditor or policyholder in the same class, and which is
accepted by a creditor or policyholder having reasonable cause to believe
that such a preference will occur, is voidable. Where the preference
consists of a transfer, such period of 4 months shall not expire until 4
months after the date of the recording or registering of the transfer if
by law such recording or registering is required.
3. Every director, officer, employee, stockholder, member or any
other person acting on behalf of such insurer, who, within 2 years prior
to the filing of a petition for an order to show cause against such
insurer under this chapter, knowingly participates in the making of any
transfer or the creation of any lien prohibited by subsection 1, and
every person receiving any property of, or cash surrender from, such
insurer or the benefit thereof as a result of a transaction voidable
under subsection 2, shall be jointly and severally liable therefor and
shall be bound to account to the Commissioner as receiver, rehabilitator,
liquidator or conservator, as the case may be.
4. The Commissioner as receiver, rehabilitator, liquidator or
conservator may avoid any transfer of or lien upon the property of an
insurer which any creditor, stockholder or member of such insurer might
have avoided and may recover the property so transferred or its value
from the person to whom it was transferred unless he was a bona fide
holder for value prior to the date of the entry of an order to show cause
under this chapter. Such property may be recovered or its value collected
from whoever may have received it except a bona fide holder for value.
(Added to NRS by 1971, 1896)
1. Except as otherwise provided in subsections 2 and 4, if an
order for liquidation or rehabilitation of a domestic insurer has been
issued, the receiver appointed under the order may recover on behalf of
the insurer:
(a) From any parent corporation, holding company, affiliate or
person who otherwise controlled the insurer, the amount of any
distribution, other than a distribution of shares of the same class of
stock, made by the insurer on its capital stock; and
(b) Any payment in the form of a bonus, settlement 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 made during the year preceding the petition for liquidation,
conservation or rehabilitation.
2. A distribution is not recoverable if the parent corporation,
holding company or affiliate shows that when made 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 the
ability of the insurer to fulfill its contractual obligations.
3. A parent corporation, holding company or person who otherwise
controlled the insurer or affiliate at the time the distribution or
payment was made is liable up to the amount of the distribution or
payment which he received. A person who otherwise controlled the insurer
at the time a distribution was declared is liable up to the amount that
would have been received if the distribution had been made immediately.
If two or more persons are liable with respect to the same distribution,
they are jointly and severally liable.
4. The greatest amount recoverable under this section is the
amount needed in excess of all other available assets of the impaired or
insolvent insurer to pay its contractual obligations and reimburse any
guaranty fund.
5. To the extent that a person liable under subsection 3 is
insolvent or otherwise fails to pay a claim due from it, a parent
corporation, holding company or person who otherwise controlled it at the
time the distribution was made is jointly and severally liable for any
resulting deficiency in the amount recovered from the person so liable.
(Added to NRS by 2001, 2251 )
1. Upon the issuance of an order of liquidation with a finding of
insolvency against a domestic insurer, the Commissioner shall apply to
the district court for authority to disburse money to the Nevada
Insurance Guaranty Association or the Nevada Life and Health Insurance
Guaranty Association out of the marshaled assets of the insurer, as money
becomes available, in amounts equal to disbursements made or to be made
by the Association for claims-handling expense and covered-claims
obligations upon the presentation of evidence that disbursements have
been made by the Association. The Commissioner shall apply to the
district court for authority to make similar disbursements to insurance
guaranty associations in other jurisdictions if one of the Nevada
Associations is entitled to like payment pursuant to the laws relating to
insolvent insurers in the jurisdiction in which the organization is
domiciled.
2. The Commissioner, in determining the amounts available for
disbursement to the Nevada Insurance Guaranty Association, the Nevada
Life and Health Insurance Guaranty Association and similar organizations
in other jurisdictions, shall reserve sufficient assets for the payment
of the expenses of administration.
3. The Commissioner shall establish procedures for the ratable
allocation of disbursements to the Nevada Insurance Guaranty Association,
the Nevada Life and Health Insurance Guaranty Association and similar
organizations in other jurisdictions, and shall secure from each
organization to which money is paid as a condition to advances in
reimbursement of covered-claims obligations an agreement to return to the
Commissioner, on demand, amounts previously advanced which are required
to pay claims of secured creditors and claims falling within the
priorities established in paragraph (a) or (b) of subsection 1 of NRS
696B.420 .
4. The Commissioner, as receiver for an insolvent insurer, may
file a claim on behalf of all insureds for any unearned premiums. The
Nevada Insurance Guaranty Association, the Nevada Life and Health
Insurance Guaranty Association and similar organizations in other
jurisdictions shall accept the claim in lieu of requiring each insured to
file a claim for the unearned premium.
(Added to NRS by 1977, 439; A 1997, 3037; 1999, 2524 ; 2003, 3333 )
1. The order of distribution of claims from the estate of the
insurer on liquidation of the insurer must be as set forth in this
section. Each claim in each class must be paid in full or adequate money
retained for the payment before the members of the next class receive any
payment. No subclasses may be established within any class. Except as
otherwise provided in subsection 2, the order of distribution and of
priority must be as follows:
(a) Administration costs and expenses, including, but not limited
to, the following:
(1) The actual and necessary costs of preserving or
recovering the assets of the insurer;
(2) Compensation for any services rendered in the
liquidation;
(3) Any necessary filing fees;
(4) The fees and mileage payable to witnesses; and
(5) Reasonable attorney’s fees.
(b) All claims under policies, any claims against an insured for
liability for bodily injury or for injury to or destruction of tangible
property which are covered claims under policies, including any such
claims of the Federal Government or any state or local government, and
any claims of the Nevada Insurance Guaranty Association, the Nevada Life
and Health Insurance Guaranty Association and other similar statutory
organizations in other jurisdictions. Any claims under life insurance and
annuity policies, whether for death proceeds, annuity proceeds or
investment values, must be treated as loss claims. That portion of any
loss for which indemnification is provided by other benefits or
advantages recovered or recoverable by the claimant may not be included
in this class, other than benefits or advantages recovered or recoverable
in discharge of familial obligations of support or because of succession
at death or as proceeds of life insurance, or as gratuities. No payment
made by an employer to his employee may be treated as a gratuity.
(c) Unearned premiums and small loss claims, including claims under
nonassessable policies for unearned premiums or other premium refunds.
(d) Except as otherwise provided in paragraph (b), claims of the
Federal Government.
(e) Except as otherwise provided in paragraph (b), claims of any
state or local government, including, but not limited to, a claim of a
state or local government for a penalty or forfeiture.
(f) Wage debts due employees for services performed, not to exceed
an amount equal to 2 months of monetary compensation for each employee
for services performed within 6 months before the filing of the petition
for liquidation or, if rehabilitation preceded liquidation, within 1 year
before the filing of the petition for rehabilitation. Officers of the
insurer are not entitled to the benefit of this priority. The priority
set forth in this paragraph must be in lieu of any other similar priority
authorized by law as to wages or compensation of employees.
(g) Residual classification, including any other claims not falling
within other classes pursuant to the provisions of this section. Claims
for a penalty or forfeiture must be allowed in this class only to the
extent of the pecuniary loss sustained from the act, transaction or
proceeding out of which the penalty or forfeiture arose, with reasonable
and actual costs occasioned thereby. The remainder of the claims must be
postponed to the class of claims specified in paragraph (j).
(h) Judgment claims based solely on judgments. If a claimant files
a claim and bases the claim on the judgment and on the underlying facts,
the claim must be considered by the liquidator, who shall give the
judgment such weight as he deems appropriate. The claim as allowed must
receive the priority it would receive in the absence of the judgment. If
the judgment is larger than the allowance on the underlying claim, the
remaining portion of the judgment must be treated as if it were a claim
based solely on a judgment.
(i) Interest on claims already paid, which must be calculated at
the legal rate compounded annually on any claims in the classes specified
in paragraphs (a) to (h), inclusive, from the date of the petition for
liquidation or the date on which the claim becomes due, whichever is
later, until the date on which the dividend is declared. The liquidator,
with the approval of the court, may:
(1) Make reasonable classifications of claims for purposes
of computing interest;
(2) Make approximate computations; and
(3) Ignore certain classifications and periods as de minimis.
(j) Miscellaneous subordinated claims, with interest as provided in
paragraph (i):
(1) Claims subordinated by NRS 696B.430 ;
(2) Claims filed late;
(3) Portions of claims subordinated pursuant to the
provisions of paragraph (g);
(4) Claims or portions of claims the payment of which is
provided by other benefits or advantages recovered or recoverable by the
claimant; and
(5) Claims not otherwise provided for in this section.
(k) Preferred ownership claims, including surplus or contribution
notes, or similar obligations, and premium refunds on assessable
policies. Interest at the legal rate must be added to each claim, as
provided in paragraphs (i) and (j).
(l) Proprietary claims of shareholders or other owners.
2. If there are no existing or potential claims of the government
against the estate, claims for wages have priority over any claims set
forth in paragraphs (c) to (k), inclusive, of subsection 1. The
provisions of this subsection must not be construed to require the
accumulation of interest for claims as described in paragraph (i) of
subsection 1.
(Added to NRS by 1971, 1897; A 1977, 440; 1997, 3038; 1999, 2524
; 2003, 3334 )
If
an ancillary receiver in another state or foreign country, by whatever
name called, fails to transfer to the domiciliary liquidator in this
state any assets within his control other than special deposits,
diminished only by the expenses, if any, of the ancillary receivership,
claims filed in the ancillary receivership, other than special deposit
claims or secured claims, must be placed in the class of claims specified
in paragraph (j) of subsection 1 of NRS 696B.420 .
(Added to NRS by 1971, 1899; A 1997, 3040; 1999, 2526 )
1. Except as provided in subsection 2, in all cases of mutual
debts or mutual credits between the insurer and another person in
connection with any action or proceeding under this chapter, such credits
and debts shall be setoff and the balance only shall be allowed or paid.
2. No offset shall be allowed in favor of any such person where:
(a) The obligation of the insurer to such person would not at the
date of the entry of any liquidation order or otherwise, as provided in
NRS 696B.400 , entitle him to share as
a claimant in the assets of the insurer;
(b) The obligation of the insurer to such person was purchased by
or transferred to such person with a view of its being used as an offset;
or
(c) The obligation of such person is to pay an assessment levied
against the members of a mutual insurer, or against the subscribers of a
reciprocal insurer, or is to pay a balance upon the subscription to the
capital stock of a stock insurer.
(Added to NRS by 1971, 1899)
1. No contingent and unliquidated claim shall share in a
distribution of the assets of an insurer which has been adjudicated to be
insolvent by an order made pursuant to this chapter, except that such
claim shall be considered, if properly presented, and may be allowed to
share where:
(a) Such claim becomes absolute against the insurer on or before
the last day for filing claims against the assets of such insurer; or
(b) There is a surplus and the liquidation is thereafter conducted
upon the basis that such insurer is solvent.
2. Where an insurer has been so adjudicated to be insolvent any
person who has a cause of action against an insured of such insurer under
a liability insurance policy issued by such insurer shall have the right
to file a claim in the liquidation proceeding, regardless of the fact
that such claim may be contingent, and such claim may be allowed:
(a) If it may be reasonably inferred from the proof presented upon
such claim that such person would be able to obtain a judgment upon such
cause of action against such insured;
(b) If such person furnishes suitable proof, unless the court for
good cause shown otherwise directs, that no further valid claim against
such insurer arising out of his cause of action other than those already
presented can be made; and
(c) If the total liability of such insurer to all claimants arising
out of the same act of its insured is no greater than its maximum
liability would be were it not in liquidation.
3. No judgment against such an insured taken after the date of
entry of the liquidation order shall be considered in the liquidation
proceedings as evidence of liability, or of the amount of damages, and no
judgment against an insured taken by default, or by collusion prior to
the entry of the liquidation order shall be considered as conclusive
evidence in the liquidation proceedings, either of the liability of such
insured to such person upon such cause of action or of the amount of
damages to which such person is therein entitled.
4. No claim of any secured claimant shall be allowed at a sum
greater than the difference between the value of the claim without
security and the value of the security itself as of the date of the entry
of the order of liquidation or such other date set by the court for
determining rights and liabilities as provided in NRS 696B.400 unless the claimant surrenders his security
to the Commissioner, in which event the claim shall be allowed in the
full amount for which it is valued.
(Added to NRS by 1971, 1899)
1. If upon the entry of an order of liquidation under this chapter
or at any time thereafter during liquidation proceedings the insurer is
not clearly solvent, the court shall, upon a hearing after such notice as
it deems proper, make and enter an order adjudging the insurer to be
insolvent.
2. After the entry of the order of insolvency, regardless of any
prior notice that may have been given to creditors, the Commissioner
shall notify all persons who may have claims against the insurer to file
such claims with him, at a place and within the time specified in the
notice, or that such claims shall be forever barred. The time specified
in the notice shall be as fixed by the court for filing of claims, which
shall be not less than 6 months after the entry of the order of
insolvency. The notice shall be given in such manner and for such
reasonable period of time as may be ordered by the court.
(Added to NRS by 1971, 1900)
Within 3 years
after the date of the entry of an order of rehabilitation or liquidation
of a domestic mutual insurer or a domestic reciprocal insurer, the
Commissioner may make and file his report and petition to the court
setting forth:
1. The reasonable value of the assets of the insurer;
2. The liabilities of the insurer to the extent thus far
ascertained by the Commissioner;
3. The aggregate amount of the assessment, if any, which the
Commissioner deems reasonably necessary to pay all claims, the costs and
expenses of the collection of the assessments and the costs and expenses
of the delinquency proceedings in full; and
4. Any other information relative to the affairs or property of
the insurer that the Commissioner deems material.
(Added to NRS by 1971, 1900)
1. Upon the filing and reading of the report and petition provided
for in NRS 696B.470 , the court, ex
parte, may order the Commissioner to assess all members or subscribers of
the insurer who may be subject to such an assessment, in such an
aggregate amount as the court finds reasonably necessary to pay all such
valid claims as may be timely filed and proved in the delinquency
proceedings, together with the costs and expenses of levying and
collecting assessments and the costs and expenses of the delinquency
proceedings in full. Any such order shall require the Commissioner to
assess each such member or subscriber for his proportion of the aggregate
assessment, according to such reasonable classification of such members
or subscribers and formula as may be made by the Commissioner and
approved by the court.
2. The court may order additional assessments upon the filing and
reading of any amendment or supplement to the report and petition
referred to in subsection 1, if such amendment or supplement is filed
within 3 years after the date of the entry of the order of rehabilitation
or liquidation.
3. After the entry of the order to levy and assess members or
subscribers of an insurer referred to in subsection 1 or 2, the
Commissioner shall levy and assess members or subscribers in accordance
with the order.
4. The total of all assessments against any member or subscriber
with respect to any policy, whether levied pursuant to this chapter or
pursuant to any other provision of this Code, shall be for no greater
amount than that specified in the policy or policies of the member or
subscriber and as limited under this Code, except as to any policy which
was issued at a rate of premium below the minimum rate lawfully permitted
for the risk insured, in which event the assessment against any such
policyholder shall be upon the basis of the minimum rate for such risk.
5. No assessment shall be levied against any member or subscriber
with respect to any nonassessable policy issued in accordance with this
Code.
(Added to NRS by 1971, 1901)
1. Any assessment of a subscriber or member of an insurer made by
the Commissioner pursuant to the order of court fixing the aggregate
amount of the assessment against all members or subscribers and approving
the classification and formula made by the Commissioner under subsection
1 of NRS 696B.480 shall be prima
facie correct.
2. Each member or subscriber shall be notified of the amount of
the assessment to be paid by him by written notice mailed to the address
of the member or subscriber last of record with the insurer. Failure of
the member or subscriber to receive the notice so mailed, within the time
specified therein or at all, shall be no defense in any proceeding to
collect the assessment.
3. If any such member or subscriber fails to pay the assessment
within the period specified in the notice, which period shall not be less
than 20 days after mailing, the Commissioner may obtain an order in the
delinquency proceedings requiring the member or subscriber to show cause
at a time and place fixed by the court why judgment should not be entered
against such member or subscriber for the amount of the assessment
together with all costs, and a copy of the order and a copy of the
petition therefor shall be served upon the member or subscriber within
the time and in the manner designated in the order.
4. If the subscriber or member, after due service of a copy of the
order and petition referred to in subsection 3 is made upon him:
(a) Fails to appear at the time and place specified in the order,
judgment shall be entered against him as prayed for in the petition; or
(b) Appears in the manner and form required by law in response to
the order, the court shall hear and determine the matter and enter a
judgment in accordance with its decision.
5. The Commissioner may collect any such assessment through any
other lawful means.
(Added to NRS by 1971, 1901)
1. If the Commissioner determines after a hearing that any insurer
has committed or engaged in, or is committing or engaging in, or is about
to commit or engage in any act, practice or transaction that would
subject it to formal delinquency proceedings under this chapter, he may
make and serve upon the insurer and other persons involved, such orders
(other than seizure orders under NRS 696B.530 and 696B.540 ) as he deems reasonably necessary to
correct, eliminate or remedy such conduct, condition or ground. Orders to
cure impairment of capital or surplus of a domestic insurer are subject
to NRS 693A.260 and 693A.270 .
2. If the Commissioner believes that irreparable harm to the
insurer, or its policyholders, creditors or the public may occur unless
his order is issued with immediate effect, he may make and serve his
order without notice and before hearing, and shall simultaneously
therewith serve upon the insurer and other persons involved the notice of
hearing as required under subsection 3.
3. The Commissioner’s order and notice of hearing shall be served
by personal service in any manner provided by the Nevada Rules of Civil
Procedure.
(Added to NRS by 1971, 1902)
1. If the Commissioner has issued a summary order before hearing
as provided in subsection 2 of NRS 696B.500 , any person upon whom such order is served
may waive the Commissioner’s hearing and apply for any immediate judicial
relief available under law and without first exhausting his
administrative remedies.
2. NRS 679B.370 (appeal from
Commissioner) applies to appeals from the Commissioner’s order made after
hearing.
(Added to NRS by 1971, 1902)
1. The Commissioner may apply for and any district court may grant
such restraining orders, temporary and permanent injunctions and other
orders as may be deemed necessary to enforce the Commissioner’s order.
2. A violation of any order of the Commissioner issued under NRS
696B.500 by any person as to whom the
order is in effect subjects the person to a penalty of not more than
$10,000, to be collected in a civil action brought by the Attorney
General in the name of the State of Nevada. The Attorney General shall
deposit all money so collected in the State Treasury for credit to the
State General Fund.
(Added to NRS by 1971, 1903; A 1979, 122; 1993, 573, 1924, 2267;
1995, 692)
1. Upon filing by the Commissioner in any district court of this
state of his verified petition alleging any ground for a formal
delinquency proceeding against an insurer under this chapter and that the
interests of the insurer’s policyholders or creditors or the public will
be jeopardized by delay, and setting forth the order deemed necessary by
the Commissioner, the court shall, ex parte and without notice or
hearing, issue the requested order. The requested order may:
(a) Direct the Commissioner to take possession and control of all
or part of the property, books, accounts and records of the insurer and
the premises occupied by it for transaction of its business; and
(b) Until further order of the court, enjoin the insurer and its
officers, managers, agents and employees from removal, concealment or
other disposition of its property, and from the transaction of its
business, except with the Commissioner’s written consent.
2. The court’s order shall be for such duration, specified in the
order, as the court deems necessary to enable the Commissioner to
ascertain the insurer’s condition. On motion of any party or on its own
motion, the court may hold such hearings as it deems desirable after such
notice as it deems appropriate, and extend or shorten the duration or
modify the terms of the order. The court shall vacate the seizure order
if the Commissioner fails to commence a formal proceeding under this
chapter after reasonable opportunity to do so; and a seizure order is
automatically vacated by issuance of the court’s order pursuant to formal
delinquency proceedings under this chapter.
3. Entry of a seizure order under this section does not constitute
an anticipatory breach of any contract of the insurer.
(Added to NRS by 1971, 1903)
1. If it appears to the Commissioner that the interests of
policyholders, creditors or the public will be jeopardized by delay
incident to requesting a court seizure order, then on any ground which
would justify a court seizure order under NRS 696B.530 , and without notice and without applying to
the court, the Commissioner may issue a seizure order which must contain
a statement verified by him of the grounds of his action. As directed by
the seizure order, the Commissioner’s representatives shall forthwith
take possession and control of all or part of the property, books,
accounts and records of the insurer, and of the premises occupied by the
insurer for transaction of its business. The Commissioner shall retain
possession and control until the order is vacated or is replaced by an
order of court pursuant to subsection 2, or pursuant to a formal
proceeding under this chapter.
2. At any time after seizure under subsection 1, the insurer may
apply to the district court for Carson City. The court shall thereupon
order the Commissioner to appear forthwith and shall thereafter proceed
as if the order were a court seizure order issued under NRS 696B.530
.
3. Every peace officer of this state shall assist the Commissioner
in making and enforcing any such seizure, and every sheriff and police
department shall furnish him with such deputies, patrolmen or officers as
are necessary for the purpose.
4. Entry of a seizure order under this section does not constitute
an anticipatory breach of any contract of the insurer.
(Added to NRS by 1971, 1904)
1. The Commissioner shall hold all hearings in summary proceedings
privately unless the insurer requests a public hearing, in which case the
hearing must be public.
2. The court may hold all hearings in summary proceedings and
judicial reviews thereof privately in chambers, and shall do so on
request of the insurer proceeded against.
3. In all summary proceedings and judicial reviews thereof, all
records of the insurer, other documents and all Division files and court
records and papers, so far as they pertain to or are part of the record
of the summary proceedings, are confidential except as necessary to
obtain compliance therewith, unless the court after hearing arguments by
the parties in chambers, orders otherwise, or unless the insurer requests
that the matter be made public. Until the court otherwise orders, all
papers filed with the clerk of the court must be held by him in a
confidential file.
4. If at any time it appears to the court that any person whose
interest is or will be substantially affected by an order did not appear
at the hearing and has not been served, the court may order that notice
be given and the proceedings be adjourned to give the person an
opportunity to appear, on such terms as may be reasonable and just.
(Added to NRS by 1971, 1904; A 1991, 1635; 1993, 1924)
Any person having possession or custody of and
refusing to deliver to the Commissioner or his representative upon
request any of the property, books, accounts, documents or other records
of an insurer against which a seizure order or a summary order has been
issued by the Commissioner or by the court, as provided in NRS 696B.500
to 696B.550 , inclusive, is guilty of a misdemeanor.
(Added to NRS by 1971, 1905)
1. The Commissioner, as receiver, all present and former deputy
receivers, special deputy receivers and their employees, and the other
officers, agents, employees and attorneys of the Division are immune from
liability, both personally and in their official capacities, for any
claim for damage to or loss of property or personal injury or other civil
liability caused by or resulting from any alleged act, error or omission
of the officers, agents, employees and attorneys of the Division arising
out of or by reason of their duties or employment. This subsection must
not be construed to hold the officers, agents, employees and attorneys of
the Division immune from liability for any damage, loss, injury or
liability caused by actual malice.
2. Attorneys, accountants, auditors and other professional persons
or firms who are retained by the Commissioner as independent contractors
and their employers must not be considered employees for the purposes of
this chapter.
3. The Commissioner, all present and former deputy receivers,
special deputy receivers and their employees, and the other officers,
agents, employees and attorneys of the Division must be indemnified for
all expenses, attorney’s fees, judgments, settlements, decrees, or
amounts due or paid in satisfaction of, or incurred in the defense of,
such a legal action, unless it is determined upon a final adjudication on
the merits of the case that the alleged acts, error or omission of the
officer, agent, employee or attorney of the division did not arise out of
or by reason of his duties or employment and was caused by actual malice.
4. The State may seek indemnification for the payment of expenses,
judgments, settlements, decrees, attorney’s fees, surety bond premiums or
other amounts paid or to be paid from the insurer’s assets. Any payment
pursuant to this section shall be deemed an administrative expense of the
insurer.
(Added to NRS by 1997, 3037; A 2001, 2252 )
1. If the Commissioner believes that rehabilitation or liquidation
of a domestic insurer or alien insurer domiciled in this state upon
grounds for such rehabilitation or liquidation set forth in this chapter
would thereby be facilitated, and whether or not delinquency proceedings
against the insurer are already pending in the courts of this state, he
may cause or consent to the filing of a petition in a federal district
court in another state for the appointment of a federal receiver of the
insurer. The Commissioner may intervene in any such action, and may
accept appointment as the federal receiver if so designated. Upon the
designation of a federal receiver in any such action, the courts of this
state shall relinquish jurisdiction of the rehabilitation or liquidation
of the insurer upon the Commissioner’s motion therefor.
2. The provisions of this chapter relating to delinquency
proceedings in courts of this state shall apply to such a federal
receivership to the extent applicable and appropriate.
3. If the Commissioner is appointed a federal receiver under this
section, he shall comply with any requirements necessary to give him
title to and control over the insurer’s assets and affairs.
(Added to NRS by 1971, 1905)
