SB92 - Authorizes a proposed increase or decrease in a rate for certain kinds and lines of insurance to be implemented pending approval or disapproval by the Commissioner of Insurance. (BDR 57-93)

S.B. 92 - *SB92* SENATE BILL NO. 92–SENATOR BUCK PREFILED JANUARY 13, 2025 ____________ Referred to Committee on Commerce and Labor SUMMARY—Authorizes a proposed increase or decrease in a rate for certain kinds and lines of insurance to be implemented pending approval or disapproval by the Commissioner of Insurance. (BDR 57-93) FISCAL NOTE: Effect on Local Government: No. 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; authorizing an insurer to implement a proposed increase or decrease in a rate for certain kinds and lines of insurance while the proposal is pending approval or disapproval by the Commissioner of Insurance; setting forth certain requirements applicable in the event that such a proposal is ultimately disapproved; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Under existing law, with certain exceptions, insurers and certain rate service 1 organizations are required to file with the Commissioner of Insurance all rates and 2 proposed increases thereto, as well as the forms of policies to which the rates 3 apply, supplementary rate information and any changes or amendments to the 4 rates. Existing law requires that such a filing include a proposed effective date and 5 be filed not less than 30 days before that proposed effective date, except that 6 the insurer or rate service organization is authorized to request that the 7 Commissioner authorize an earlier effective date. (NRS 686B.070) Existing law 8 sets forth procedures by which the Commissioner is required to approve or 9 disapprove a proposed increase or decrease in a rate for any kind or line of 10 insurance other than certain health plans. Under existing law, the Commissioner is 11 required to approve or disapprove each proposal not later than 30 days after it is 12 determined by the Commissioner to be complete. Existing law sets forth procedures 13 to allow an insurer or rate service organization to request reconsideration of a 14 disapproved proposed increase or decrease and a hearing to be held on the matter. 15 (NRS 686B.110) 16 This bill revises those provisions to allow an insurer to implement a proposed 17 increase or decrease in certain rates while the process for the approval or 18 disapproval proceeds. Section 1 of this bill requires a filing for a proposed increase 19 – 2 – - *SB92* or decrease in a rate for any kind or line of insurance for which the filing of rates is 20 required, other than certain health plans, to be filed on or before the proposed 21 effective date included in the filing. Section 1 authorizes an insurer to implement 22 such a proposed increase or decrease while the proposal is pending approval or 23 disapproval by the Commissioner. 24 Section 3 of this bill provides that if the Commissioner disapproves such a 25 proposed increase or decrease and the insurer has implemented the proposed 26 increase or decrease, the Commissioner is required to issue a written order that 27 includes, among other things, the date on which the disapproved increased or 28 decreased rate must no longer be used for the issuance of new policies or contracts 29 or the renewal of existing policies or contracts. Section 3 requires that date to be 30 not less than 90 days after the written order is issued. Under section 3, the order 31 does not affect any policy or contract made before the effective date of the order, 32 except that the Commissioner is authorized to require that the premiums be 33 adjusted after the effective date of the order for those policies or contracts in effect 34 on the effective date of the order. 35 Under existing law, if a filing for a proposed increase in a rate is not 36 accompanied by certain information, the Commissioner is authorized to inform the 37 insurer and the filing is deemed to be made when the information is furnished. 38 (NRS 686B.100) Section 2 of this bill deems a filing for a proposed increase in a 39 rate for any kind or line of insurance, other than certain health plans, for the 40 purpose of implementing the proposed increase pending the approval or 41 disapproval of the Commissioner to be filed on the date on which it is filed with the 42 Commissioner, regardless of whether the filing is accompanied by such 43 information. Similarly, existing law provides that if the Commissioner determines 44 that a proposal to increase or decrease a rate is incomplete, the Commissioner must 45 notify the insurer or rate service organization of that determination and, if the 46 insurer does not provide the necessary documents or other information within 30 47 days after the receipt of that notice, the Commissioner is authorized to disapprove 48 the proposal. (NRS 686B.110) Section 3 provides that a determination that a 49 proposal to increase or decrease a rate for any kind or line of insurance, other than 50 certain health plans, is incomplete does not prohibit an insurer from implementing 51 the proposed increase or decrease pending approval or disapproval. 52 Sections 4 and 5 of this bill make conforming changes to refer to provisions 53 that have been renumbered by section 1. 54 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 686B.070 is hereby amended to read as 1 follows: 2 686B.070 1. Every authorized insurer and every rate service 3 organization licensed under NRS 686B.140 which has been 4 designated by any insurer for the filing of rates under subsection 2 5 of NRS 686B.090 shall file with the Commissioner all: 6 (a) Rates and proposed increases thereto; 7 (b) Forms of policies to which the rates apply; 8 (c) Supplementary rate information; and 9 (d) Changes and amendments thereof, 10  made by it for use in this state. 11 – 3 – - *SB92* 2. [A] Except as otherwise provided in subsection 3, a filing 1 made pursuant to this section must include a proposed effective date 2 and must be filed not less than 30 days before that proposed 3 effective date, except that a filing for a proposed increase or 4 decrease in a rate for a health plan described in NRS 686B.112 5 may include a request that the Commissioner authorize an effective 6 date that is earlier than the proposed effective date. 7 3. A filing made pursuant to this section for a proposed 8 increase or decrease in a rate for any kind or line of insurance or 9 subdivision thereof, other than a health plan described in NRS 10 686B.112, must be filed on or before the proposed effective date 11 included in the filing. An insurer may implement the proposed 12 increase or decrease on the proposed effective date included in the 13 filing while the proposed increase or decrease is pending approval 14 or disapproval by the Commissioner pursuant to NRS 686B.110. 15 4. If an insurer makes a filing for a proposed increase in a rate 16 for insurance covering the liability of a practitioner licensed 17 pursuant to chapter 630, 631, 632 or 633 of NRS for a breach of the 18 practitioner’s professional duty toward a patient, the insurer shall 19 not include in the filing any component that is directly or indirectly 20 related to the following: 21 (a) Capital losses, diminished cash flow from any dividends, 22 interest or other investment returns, or any other financial loss that 23 is materially outside of the claims experience of the professional 24 liability insurance industry, as determined by the Commissioner. 25 (b) Losses that are the result of any criminal or fraudulent 26 activities of a director, officer or employee of the insurer. 27  If the Commissioner determines that a filing includes any such 28 component, the Commissioner shall, pursuant to NRS 686B.110, 29 disapprove the proposed increase, in whole or in part, to the extent 30 that the proposed increase relies upon such a component. 31 [4.] 5. If an insurer makes a filing for a proposed increase in a 32 rate for a health benefit plan, as that term is defined in NRS 33 687B.470, the filing must include a unified rate review template, a 34 written description justifying the rate increase and any rate filing 35 documentation. 36 [5.] 6. As used in this section, “rate filing documentation,” 37 “unified rate review template” and “written description 38 justifying the rate increase” have the meanings ascribed in 45 C.F.R. 39 § 154.215. 40 Sec. 2. NRS 686B.100 is hereby amended to read as follows: 41 686B.100 1. By rule, the Commissioner may require the 42 filing of supporting data as to any or all kinds or lines of insurance 43 or subdivisions thereof or classes of risks or combinations thereof as 44 the Commissioner deems necessary for the proper functioning of the 45 – 4 – - *SB92* process for monitoring and regulating rates. The supporting data 1 must include: 2 (a) The experience and judgment of the filer, and, to the extent it 3 wishes or the Commissioner requires, of other insurers or rate 4 service organizations; 5 (b) Its interpretation of any statistical data relied upon; 6 (c) Descriptions of the actuarial and statistical methods 7 employed in setting the rates; and 8 (d) Any other relevant matters required by the Commissioner. 9 2. [Whenever] Except as otherwise provided in this 10 subsection, whenever a filing of a proposed increase in a rate is not 11 accompanied by such information as the Commissioner has required 12 under subsection 1, the Commissioner may so inform the insurer 13 and the filing shall be deemed to be made when the information is 14 furnished. For the purposes of implementing a proposed increase 15 in a rate for any kind or line of insurance or subdivision thereof, 16 other than a health plan described in NRS 686B.112, pursuant to 17 subsection 3 of NRS 686B.070, the filing of such a proposed 18 increase shall be deemed to be made on the date on which it is 19 filed with the Commissioner, regardless of whether the filing is 20 accompanied by any information required by the Commissioner 21 pursuant to subsection 1. 22 Sec. 3. NRS 686B.110 is hereby amended to read as follows: 23 686B.110 1. Except as otherwise provided in NRS 686B.112, 24 the Commissioner shall consider each proposed increase or decrease 25 in the rate of any kind or line of insurance or subdivision thereof 26 filed with the Commissioner pursuant to subsection 1 of NRS 27 686B.070. If the Commissioner finds that a proposed increase will 28 result in a rate which is not in compliance with NRS 686B.050 or 29 subsection [3] 4 of NRS 686B.070, the Commissioner shall 30 disapprove the proposal. The Commissioner shall approve or 31 disapprove each proposal no later than 30 days after it is determined 32 by the Commissioner to be complete pursuant to subsection 6. If the 33 Commissioner fails to approve or disapprove the proposal within 34 that period, the proposal shall be deemed approved. 35 2. If the Commissioner disapproves a proposed increase or 36 decrease in any rate pursuant to subsection 1, the Commissioner 37 shall send a written notice of disapproval to the insurer or the rate 38 service organization that filed the proposal. The notice must set 39 forth the reasons the proposal is not in compliance with NRS 40 686B.050 or subsection [3] 4 of NRS 686B.070 and must be sent to 41 the insurer or the rate service organization not more than 30 days 42 after the Commissioner determines that the proposal is complete 43 pursuant to subsection 6. 44 – 5 – - *SB92* 3. Upon receipt of a written notice of disapproval from the 1 Commissioner pursuant to subsection 2 or 6, the insurer or rate 2 service organization may request that the Commissioner reconsider 3 the proposed increase or decrease. The request for reconsideration 4 must be received by the Commissioner not more than 30 days after 5 the insurer or rate service organization receives the written notice of 6 disapproval from the Commissioner, except that if the insurer or rate 7 service organization requests, in writing, an extension of 30 8 additional days in which to request a reconsideration, the 9 Commissioner shall grant the extension. A request for 10 reconsideration submitted pursuant to this subsection may include, 11 without limitation, any documents or other information for review 12 by the Commissioner in reconsidering the proposal. The 13 Commissioner shall approve or disapprove the proposal upon 14 reconsideration not later than 30 days after receipt of the request for 15 reconsideration and shall notify the insurer or rate service 16 organization of his or her approval or disapproval. 17 4. Whenever an insurer has no legally effective rates as a result 18 of the Commissioner’s disapproval of rates or other act, the 19 Commissioner shall on request specify interim rates for the insurer 20 that are high enough to protect the interests of all parties and may 21 order that a specified portion of the premiums be placed in an 22 escrow account approved by the Commissioner. When new rates 23 become legally effective, the Commissioner shall order the 24 escrowed funds or any overcharge in the interim rates to be 25 distributed appropriately, except that refunds to policyholders that 26 are de minimis must not be required. 27 5. If the Commissioner disapproves a proposed rate pursuant to 28 subsection 1 or subsection 6 or upon reconsideration pursuant to 29 subsection 3 and an insurer requests a hearing to determine the 30 validity of the action of the Commissioner, the insurer has the 31 burden of showing compliance with the applicable standards for 32 rates established in NRS 686B.010 to 686B.1799, inclusive. Any 33 such hearing must be held: 34 (a) Within 30 days after the request for a hearing has been 35 submitted to the Commissioner; or 36 (b) Within a period agreed upon by the insurer and the 37 Commissioner. 38  If the hearing is not held within the period specified in paragraph 39 (a) or (b), or if the Commissioner fails to issue an order concerning 40 the proposed rate for which the hearing is held within 45 days after 41 the hearing, the proposed rate shall be deemed approved. 42 6. The Commissioner shall by regulation specify the 43 documents or any other information which must be included in a 44 proposal to increase or decrease a rate submitted to the 45 – 6 – - *SB92* Commissioner pursuant to subsection 1. Each such [Text truncated for display. Full text available on LegiScan.]