AB74 - Revises provisions relating to insurance. (BDR 57-256)

REQUIRES TWO-THIRDS MAJORITY VOTE (§ 199 & NRS 683A.08524) A.B. 74 - *AB74* ASSEMBLY BILL NO. 74–COMMITTEE ON COMMERCE AND LABOR (ON BEHALF OF THE DIVISION OF INSURANCE OF THE DEPARTMENT OF BUSINESS AND INDUSTRY) PREFILED NOVEMBER 20, 2024 ____________ Referred to Committee on Commerce and Labor SUMMARY—Revises provisions relating to insurance. (BDR 57-256) FISCAL NOTE: Effect on Local Government: Increases or Newly Provides for Term of Imprisonment in County or City Jail or Detention Facility. Effect on the State: Yes. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to insurance; making various changes to the Nevada Insurance Code; revising provisions governing examinations of insurers and other persons subject to regulation under the Code; revising certain powers and duties of the Commissioner of Insurance; revising various requirements and restrictions imposed on insurers and other persons subject to regulation under the Code; revising provisions relating to service contracts, providers of service contracts and administrators of service contracts; repealing provisions governing insurance for home protection; revising provisions relating to administrators; standardizing the definitions of certain words and terms; revising provisions relating to adjustors; revising provisions relating to certain trade practices and frauds; removing certain obsolete and duplicative provisions; transferring certain duties from the Commissioner of Financial Institutions to the Commissioner of Mortgage Lending; revising provisions relating to certain accounts and funds relevant to the regulation of certain insurers and insurance administration; designating certain employees of the Division of Insurance of the Department of Business and Industry as category II peace officers; providing penalties; and providing other matters properly relating thereto. – 2 – - *AB74* Legislative Counsel’s Digest: Existing law requires the Commissioner of Insurance to regulate insurance in 1 this State and enforce the provisions of the Nevada Insurance Code. (NRS 2 679B.120) Existing law sets forth various requirements relating to examinations of 3 insurers, which are conducted by the Commissioner. (NRS 679B.230-679B.300) 4 Section 354 of this bill repeals those provisions of existing law relating to 5 examinations of insurers. Sections 1-41 of this bill reenact, reorganize and revise 6 those provisions into a new chapter of the Nevada Revised Statutes governing 7 examinations of insurers and other persons subject to regulation under the Nevada 8 Insurance Code. Sections 3-12 and 27-41 additionally enact provisions that are 9 modeled, in general, after the Market Conduct Surveillance Model Law adopted by 10 the National Association of Insurance Commissioners and which: (1) require the 11 Commissioner to collect and analyze information concerning the market practices 12 of insurers; and (2) authorize the Commissioner to take certain actions, including, 13 without limitation, the conducting of certain examinations, based on the results of 14 that analysis. Sections 43, 54, 65, 111, 113, 114, 124-127, 197, 203, 210, 213, 216- 15 218, 221, 223, 229, 251, 253, 269, 289-291, 293, 294, 297, 318, 319, 336, 340 and 16 342 of this bill make conforming changes to replace references in existing law to 17 the sections which were repealed and reenacted in sections 2-41. 18 Section 42 of this bill authorizes the Commissioner, during a state of 19 emergency or declaration of disaster, to issue a temporary order to address certain 20 matters relating to policies issued in this State. Section 42 requires each such order 21 to be approved by the Governor and meet certain other requirements. Section 333 22 of this bill exempts any order issued by the Commissioner pursuant to section 42 23 from the requirements of the Nevada Administrative Procedure Act. 24 (NRS 233B.039) 25 Section 44 of this bill expands the applicability of a provision of existing law 26 requiring the Secretary of State to nullify the charter or certificate of certain 27 insurers who are prohibited from transacting insurance in this State to include any 28 person who is prohibited from transacting insurance in this State. Section 45 of this 29 bill revises requirements imposed on the Commissioner concerning the publication 30 of a guide to rates for policies of insurance for motor vehicles. Section 46 of this 31 bill revises provisions governing oversight by the Commissioner of certain usual 32 and customary fees or reimbursement methodologies. Section 47 of this bill 33 authorizes an attorney employed by the Division of Insurance of the Department of 34 Business and Industry to act as legal counsel to the Division and the Commissioner 35 in certain matters, instead of the Attorney General. Section 48 of this bill: (1) 36 authorizes the Commissioner to enter into contracts with the National Association 37 of Insurance Commissioners for goods and services related to the regulation of 38 insurance; and (2) exempts such a contract from the provisions of existing law 39 governing purchasing for the State. Section 116 of this bill makes a conforming 40 change to update an internal reference changed by section 48. Section 51 of this 41 bill authorizes the Commissioner to limit, in addition to suspending, the certificate 42 of authority of an insurer under certain circumstances. 43 Existing law provides for the registration and regulation of administrators by 44 the Commissioner. (NRS 683A.0805-683A.0893) Section 55 of this bill requires an 45 administrator to report to the Commissioner certain information concerning 46 administrative actions and criminal prosecutions against the administrator. Section 47 57 of this bill applies certain definitions in existing law relating to administrators to 48 section 55. Sections 58-60 of this bill revise provisions relating to certain: (1) 49 documents which are required as part of an application for registration as an 50 administrator; (2) bonds which are required to be filed by an administrator; and (3) 51 recordkeeping requirements for administrators. Section 61 of this bill authorizes an 52 administrator to use accounts in a financial institution not located in this State to 53 hold certain money in a fiduciary capacity. Section 62 of this bill authorizes the 54 – 3 – - *AB74* Commissioner to revoke the registration of an administrator without further notice 55 if the registration has already been suspended and the administrator becomes 56 nonresponsive. 57 Existing law provides for the registration and regulation of providers of service 58 contracts by the Commissioner. (Chapter 690C of NRS) Sections 52 and 205 of 59 this bill: (1) reduce from 2 years to 1 year the length of time that a certificate of 60 registration for a service contract provider is valid; and (2) proportionally reduce 61 the fees for registration and renewal to reflect annual instead of biennial 62 registration. Sections 202, 207 and 209 of this bill revise provisions relating to 63 certain duties and requirements for the registration of a service contract provider. 64 Section 206 of this bill revises provisions relating to the financial security which is 65 required of a service contract provider. Section 208 of this bill requires a service 66 contract to include the name of the holder of the service contract. Sections 56, 199, 67 201 and 204 of this bill: (1) require a person who administers a service contract to 68 obtain a certificate of registration as an administrator issued by the Commissioner; 69 (2) subject such an administrator to the provisions of existing law governing 70 administrators; and (3) set forth certain requirements for the operation of such an 71 administrator. Sections 200 and 211 of this bill authorize the Commissioner to: (1) 72 issue a cease and desist order under certain circumstances; and (2) suspend, without 73 advance notice or a hearing, the registration of a service contract provider if the 74 provider violates a cease and desist order from the Commissioner. Section 212 of 75 this bill increases the maximum fines the Commissioner may assess for certain 76 violations of existing law relating to service contracts. 77 Section 64 of this bill: (1) removes a provision requiring certain hearings to be 78 held within 30 days of a written application under certain circumstances, thus 79 making existing law applicable which provides a 60-day timeline for such hearings 80 under those circumstances; and (2) authorizes the Commissioner, after notice and 81 the opportunity for a hearing, to take certain actions against the license of a 82 business organization. (NRS 679B.310) 83 Existing law provides for the licensure and regulation of independent adjusters, 84 public adjusters, company adjusters and staff adjusters by the Commissioner. 85 (Chapter 684A of NRS) Section 67 of this bill eliminates the staff adjuster and 86 company adjuster license types and instead consolidates those license types into the 87 independent adjuster license type. Sections 66, 68-70, 73-76, 343 and 344 of this 88 bill make conforming changes to reflect that consolidation. 89 Existing law generally exempts a person who is licensed as an adjuster in 90 another state from the requirement to take and pass an examination to obtain a 91 nonresident license as an adjuster under certain circumstances. Sections 71 and 72 92 of this bill require a person to take and pass such an examination if the home state 93 of the person requires a nonresident applicant for a license as an adjuster to take 94 and pass an examination for licensure. 95 Section 77 of this bill revises requirements for licensing as a surplus lines 96 broker. Section 78 of this bill revises provisions relating to the Commissioner 97 accepting service of process on behalf of unauthorized insurers in certain 98 circumstances. 99 Existing law governs trade practices and frauds relating to the insurance 100 business and gives the Commissioner exclusive jurisdiction to regulate trade 101 practices in the insurance business. (Chapter 686A of NRS) Sections 80-83, 97, 99, 102 101, 102 and 110 of this bill revise and add to the provisions of existing law 103 governing trade practices and frauds for the purpose of conforming more closely to 104 the Unfair Trade Practices Act adopted by the National Association of Insurance 105 Commissioners. Section 80 prohibits an insurer from taking certain discriminatory 106 actions. Section 81 imposes certain requirements on an insurer relating to 107 recordkeeping. Section 82 prohibits a person from making certain false or 108 fraudulent statements or representations. Section 83 requires a property and 109 – 4 – - *AB74* casualty insurer to provide to a primary insured certain loss information upon 110 request. Section 97 prohibits an insurer from providing certain inducements to 111 purchase insurance. Section 99 sets forth certain restrictions upon a person, bank or 112 affiliate relating to insurance. Section 101 sets forth certain actions relating to 113 value-added products or services that do not constitute prohibited discrimination or 114 rebates. Section 102 sets forth certain actions that constitute prohibited unfair 115 discrimination. Section 110 sets forth certain recordkeeping requirements for a 116 person who generates leads for an insurer or producer of insurance relating to 117 health insurance products and services. 118 Existing law prohibits certain health insurers from denying a claim, refusing to 119 issue or cancelling a policy of health insurance solely because the claim involves an 120 act of domestic violence or the person applying for or covered by the policy was the 121 victim of such an act of domestic violence. (NRS 689A.413, 689B.068, 689C.196, 122 695A.195, 695B.316, 695C.203, 695D.217) Section 354 repeals those provisions. 123 Sections 84-93 of this bill instead set forth restrictions concerning discrimination 124 based on domestic violence which are modeled, in general, after several model acts 125 adopted by the National Association of Insurance Commissioners relating to unfair 126 discrimination against subjects of abuse. Sections 83-92 prohibit insurers, 127 insurance professionals and other persons from engaging in various discriminatory 128 actions relating to domestic violence, including, among other actions: (1) denying, 129 refusing to issue or renew, cancelling or otherwise terminating a policy of insurance 130 on the basis of the domestic violence status of a person; and (2) with certain 131 exceptions, denying benefits on a policy of insurance on the basis of domestic 132 violence status, including, without limitation, denying a claim under a policy of 133 health insurance solely because the claim involves an act that constitutes domestic 134 violence. Section 93 requires an insurer or insurance professional to explain to an 135 applicant or insured, and demonstrate to the Commissioner, certain matters relating 136 to certain actions involving medical conditions relating to domestic violence. 137 Section 109 of this bill sets forth certain unfair trade practices relating to the 138 handling of claims that are modeled, in general, after provisions set forth in the 139 Unfair Claims Settlement Practices Act adopted by the National Association of 140 Insurance Commissioners. 141 Section 115 of this bill limits deductions for depreciation in the settlement of 142 certain property insurance claims to the cost of physical goods being repaired or 143 replaced. 144 Section 117 of this bill reduces the time within which an insurer is required to 145 respond to a request for prior authorization, from within 20 days after the insurer 146 received the request to: (1) within 2 business days after the date of submission of 147 the request, if the request involves urgent health care services; and (2) within 5 148 business days after the date of submission of the request, if the request does not 149 involve urgent health care services. 150 Existing law prohibits an insurer from taking certain adverse actions against a 151 policy of motor vehicle insurance as a result of the filing of certain claims or the 152 making of certain inquiries. (NRS 687B.385) Section 118 of this bill expands that 153 prohibition to prohibit an insurer from taking certain adverse actions against a 154 policy of property or casualty insurance as a result of the filing o [Text truncated for display. Full text available on LegiScan.]