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CHAPTER 517, SB 512

Senate Bill No. 512–Committee on Finance

 

CHAPTER 517

 

[Approved: June 10, 2015]

 

AN ACT relating to real property; authorizing a mortgagor or a grantor or the person who holds title of record with respect to a deed of trust to initiate participation in what is commonly known as the Foreclosure Mediation Program with the mortgagee or beneficiary of the deed of trust under certain circumstances; abolishing the Program as of June 30, 2017; and providing other matters properly relating thereto.

Legislative Counsel’s Digest:

      Existing law provides for the establishment of a foreclosure mediation program and generally requires that mediation, unless waived, be conducted as a condition of a judicial foreclosure proceeding or the exercise of a power of sale affecting owner-occupied housing. The Nevada Supreme Court is required to adopt rules to implement the program. (NRS 40.437, 107.086) Existing law also creates the Account for Foreclosure Mediation, the money in which may be expended only for the purpose of supporting the program. (NRS 107.080)

      Section 1 of this bill authorizes a mortgagor under a mortgage secured by owner-occupied housing or a grantor or the person who holds the title of record with respect to a deed of trust concerning owner-occupied housing to initiate the mediation process if: (1) a local housing counseling agency approved by the United States Department of Housing and Urban Development certifies that the mortgagor, grantor or person who holds the title of record has a documented financial hardship and is in imminent risk of default; (2) the mortgagor, grantor or other person files a form with the Mediation Administrator indicating an election to enter into mediation; and (3) the mortgagor, grantor or other person pays his or her share of the fee for the mediation. Under this bill, if the parties participate in mediation in good faith, the requirement of existing law to participate in mediation before a nonjudicial foreclosure sale of the owner-occupied housing is satisfied.

      Section 10.5 of this bill authorizes the Court Administrator, under certain circumstances, to submit to the Interim Finance Committee a request for an allocation from the Contingency Account created by NRS 353.266 for deposit in the Account for Foreclosure Mediation.

      Section 12 of this bill repeals the existing statutes providing for the foreclosure mediation program, effective on June 30, 2017, effectively ending the program on that date. Section 1 also expires by limitation on that date. Under sections 1, 2.5 and 8.5 of this bill, December 31, 2016, is the last date on which a homeowner can enroll in the foreclosure mediation program. Persons initiating foreclosures after December 1, 2016, need not provide notice of the mediation program. Sections 1.5, 2, 3-8, 9, 10 and 11 of this bill make conforming changes.

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

      Section 1. Chapter 107 of NRS is hereby amended by adding thereto a new section to read as follows:

      1.  A mortgagor under a mortgage secured by owner-occupied housing or a grantor or the person who holds the title of record with respect to any trust agreement which concerns owner-occupied housing may initiate mediation to negotiate a loan modification under the mediation process set forth in NRS 107.086 if, on or before December 31, 2016:

 


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mediation to negotiate a loan modification under the mediation process set forth in NRS 107.086 if, on or before December 31, 2016:

      (a) A local housing counseling agency approved by the United States Department of Housing and Urban Development certifies that the mortgagor, grantor or person who holds the title of record:

             (1) Has a documented financial hardship; and

             (2) Is in imminent risk of default; and

      (b) The mortgagor, grantor or person who holds the title of record:

             (1) Submits a form prescribed by the Mediation Administrator indicating an election to enter into mediation pursuant to this section; and

             (2) Pays to the Mediation Administrator his or her share of the fee established pursuant to subsection 11 of NRS 107.086.

      2.  Upon satisfaction of the requirements of subsection 1, the Mediation Administrator shall notify the mortgage servicer, by certified mail, return receipt requested, of the enrollment of the mortgagor, grantor or person who holds the title of record to participate in mediation pursuant to this section and shall assign the matter to a senior justice, judge, hearing master or other designee and schedule the matter for mediation. The mortgage servicer shall notify the mortgagee or the beneficiary of the deed of trust, as applicable, and every other person with an interest as defined in NRS 107.090, by certified mail, return receipt requested, of the enrollment of the mortgagor, grantor or person who holds the title of record to participate in mediation.

      3.  Each mediation required by this section must be conducted in conformity with the requirements of subsections 5 and 6 of NRS 107.086.

      4.  If the mediator determines that the parties, while acting in good faith, are not able to agree to a loan modification, the mediator shall prepare and submit to the Mediation Administrator a recommendation that the matter be terminated. The Mediation Administrator shall, not later than 30 days after submittal of the mediator’s recommendation that the matter be terminated, provide to the mortgage servicer a certificate which provides that the mediation required by this section has been completed in the matter. If the Mediation Administrator provides such a certificate, the requirement for mediation pursuant to NRS 107.086 is satisfied.

      5.  The certificate provided pursuant to subsection 4 must be in the same form as the certificate provided pursuant to subsection 8 of NRS 107.086, and may be recorded in the office of the county recorder in which the trust property, or some part thereof, is situated. The recording of the certificate in the office of the county recorder in which the trust property, or some part thereof, is situated shall be deemed to be the recording of the certificate required pursuant to subparagraph (2) of paragraph (d) of subsection 2 of NRS 107.086.

      6.  A noncommercial lender is not excluded from the application of this section.

      7.  The Mediation Administrator and each mediator who acts pursuant to this section in good faith and without gross negligence are immune from civil liability for those acts.

      8.  As used in this section:

      (a) “Financial hardship” means a documented event that would prevent the long-term payment of any debt relating to a mortgage or deed of trust secured by owner-occupied housing, including, without limitation:

 


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             (1) The death of the borrower or co-borrower;

             (2) Serious illness;

             (3) Divorce or separation; or

             (4) Job loss or a reduction in pay.

      (b) “Imminent risk of default” means the inability of a grantor or the person who holds the title of record to make his or her mortgage payment within the next 90 days.

      (c) “Mediation Administrator” has the meaning ascribed to it in NRS 107.086.

      (d) “Noncommercial lender” has the meaning ascribed to it in NRS 107.086.

      (e) “Owner-occupied housing” has the meaning ascribed to it in NRS 107.086.

      Sec. 1.5. NRS 107.080 is hereby amended to read as follows:

      107.080  1.  Except as otherwise provided in NRS 106.210 [,] and 107.085 , [and 107.086,] if any transfer in trust of any estate in real property is made after March 29, 1927, to secure the performance of an obligation or the payment of any debt, a power of sale is hereby conferred upon the trustee to be exercised after a breach of the obligation for which the transfer is security.

      2.  The power of sale must not be exercised, however, until:

      (a) Except as otherwise provided in paragraph (b), in the case of any trust agreement coming into force:

             (1) On or after July 1, 1949, and before July 1, 1957, the grantor, the person who holds the title of record, a beneficiary under a subordinate deed of trust or any other person who has a subordinate lien or encumbrance of record on the property has, for a period of 15 days, computed as prescribed in subsection 3, failed to make good the deficiency in performance or payment; or

             (2) On or after July 1, 1957, the grantor, the person who holds the title of record, a beneficiary under a subordinate deed of trust or any other person who has a subordinate lien or encumbrance of record on the property has, for a period of 35 days, computed as prescribed in subsection 3, failed to make good the deficiency in performance or payment.

      (b) In the case of any trust agreement which concerns owner-occupied housing , [as defined in NRS 107.086,] the grantor, the person who holds the title of record, a beneficiary under a subordinate deed of trust or any other person who has a subordinate lien or encumbrance of record on the property has, for a period that commences in the manner and subject to the requirements described in subsection 3 and expires 5 days before the date of sale, failed to make good the deficiency in performance or payment.

      (c) The beneficiary, the successor in interest of the beneficiary or the trustee first executes and causes to be recorded in the office of the recorder of the county wherein the trust property, or some part thereof, is situated a notice of the breach and of the election to sell or cause to be sold the property to satisfy the obligation which, except as otherwise provided in this paragraph, includes a notarized affidavit of authority to exercise the power of sale. Except as otherwise provided in subparagraph (5), the affidavit required by this paragraph must state under the penalty of perjury the following information, which must be based on the direct, personal knowledge of the affiant or the personal knowledge which the affiant acquired by a review of the business records of the beneficiary, the successor in interest of the beneficiary or the servicer of the obligation or debt secured by the deed of trust, which business records must meet the standards set forth in NRS 51.135:

 


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beneficiary or the servicer of the obligation or debt secured by the deed of trust, which business records must meet the standards set forth in NRS 51.135:

             (1) The full name and business address of the current trustee or the current trustee’s personal representative or assignee, the current holder of the note secured by the deed of trust, the current beneficiary of record and the current servicer of the obligation or debt secured by the deed of trust.

             (2) That the beneficiary under the deed of trust, the successor in interest of the beneficiary or the trustee is in actual or constructive possession of the note secured by the deed of trust or that the beneficiary or its successor in interest or the trustee is entitled to enforce the obligation or debt secured by the deed of trust. For the purposes of this subparagraph, if the obligation or debt is an instrument, as defined in subsection 2 of NRS 104.3103, a beneficiary or its successor in interest or the trustee is entitled to enforce the instrument if the beneficiary or its successor in interest or the trustee is:

                   (I) The holder of the instrument;

                   (II) A nonholder in possession of the instrument who has the rights of a holder; or

                   (III) A person not in possession of the instrument who is entitled to enforce the instrument pursuant to a court order issued under NRS 104.3309.

             (3) That the beneficiary or its successor in interest, the servicer of the obligation or debt secured by the deed of trust or the trustee, or an attorney representing any of those persons, has sent to the obligor or borrower of the obligation or debt secured by the deed of trust a written statement of:

                   (I) The amount of payment required to make good the deficiency in performance or payment, avoid the exercise of the power of sale and reinstate the terms and conditions of the underlying obligation or debt existing before the deficiency in performance or payment, as of the date of the statement;

                   (II) The amount in default;

                   (III) The principal amount of the obligation or debt secured by the deed of trust;

                   (IV) The amount of accrued interest and late charges;

                   (V) A good faith estimate of all fees imposed in connection with the exercise of the power of sale; and

                   (VI) Contact information for obtaining the most current amounts due and the local or toll-free telephone number described in subparagraph (4).

             (4) A local or toll-free telephone number that the obligor or borrower of the obligation or debt may call to receive the most current amounts due and a recitation of the information contained in the affidavit.

             (5) The date and the recordation number or other unique designation of, and the name of each assignee under, each recorded assignment of the deed of trust. The information required to be stated in the affidavit pursuant to this subparagraph may be based on:

                   (I) The direct, personal knowledge of the affiant;

                   (II) The personal knowledge which the affiant acquired by a review of the business records of the beneficiary, the successor in interest of the beneficiary or the servicer of the obligation or debt secured by the deed of trust, which business records must meet the standards set forth in NRS 51.135;

 


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the beneficiary or the servicer of the obligation or debt secured by the deed of trust, which business records must meet the standards set forth in NRS 51.135;

                   (III) Information contained in the records of the recorder of the county in which the property is located; or

                   (IV) The title guaranty or title insurance issued by a title insurer or title agent authorized to do business in this State pursuant to chapter 692A of NRS.

Ê The affidavit described in this paragraph is not required for the exercise of the trustee’s power of sale with respect to any trust agreement which concerns a time share within a time-share plan created pursuant to chapter 119A of NRS if the power of sale is being exercised for the initial beneficiary under the deed of trust or an affiliate of the initial beneficiary.

      (d) The beneficiary or its successor in interest or the servicer of the obligation or debt secured by the deed of trust has instructed the trustee to exercise the power of sale with respect to the property.

      (e) Not less than 3 months have elapsed after the recording of the notice or, if the notice includes an affidavit and a certification indicating that, pursuant to NRS 107.130, an election has been made to use the expedited procedure for the exercise of the power of sale with respect to abandoned residential property, not less than 60 days have elapsed after the recording of the notice.

      3.  The 15- or 35-day period provided in paragraph (a) of subsection 2, or the period provided in paragraph (b) of subsection 2, commences on the first day following the day upon which the notice of default and election to sell is recorded in the office of the county recorder of the county in which the property is located and a copy of the notice of default and election to sell is mailed by registered or certified mail, return receipt requested and with postage prepaid to the grantor or, to the person who holds the title of record on the date the notice of default and election to sell is recorded, and, if the property is operated as a facility licensed under chapter 449 of NRS, to the State Board of Health, at their respective addresses, if known, otherwise to the address of the trust property. The notice of default and election to sell must:

      (a) Describe the deficiency in performance or payment and may contain a notice of intent to declare the entire unpaid balance due if acceleration is permitted by the obligation secured by the deed of trust, but acceleration must not occur if the deficiency in performance or payment is made good and any costs, fees and expenses incident to the preparation or recordation of the notice and incident to the making good of the deficiency in performance or payment are paid within the time specified in subsection 2;

      (b) If the property is subject to the requirements of NRS 107.400 to 107.560, inclusive, contain the declaration required by subsection 6 of NRS 107.510;

      (c) If, pursuant to NRS 107.130, an election has been made to use the expedited procedure for the exercise of the power of sale with respect to abandoned residential property, include the affidavit and certification required by subsection 6 of NRS 107.130; and

      (d) If the property is a residential foreclosure, comply with the provisions of NRS 107.087.

      4.  The trustee, or other person authorized to make the sale under the terms of the trust deed or transfer in trust, shall, after expiration of the applicable period specified in paragraph (d) of subsection 2 following the recording of the notice of breach and election to sell, and before the making of the sale, give notice of the time and place thereof by recording the notice of sale and by:

 


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applicable period specified in paragraph (d) of subsection 2 following the recording of the notice of breach and election to sell, and before the making of the sale, give notice of the time and place thereof by recording the notice of sale and by:

      (a) Providing the notice to each trustor, any other person entitled to notice pursuant to this section and, if the property is operated as a facility licensed under chapter 449 of NRS, the State Board of Health, by personal service or by mailing the notice by registered or certified mail to the last known address of the trustor and any other person entitled to such notice pursuant to this section;

      (b) Posting a similar notice particularly describing the property, for 20 days successively, in a public place in the county where the property is situated;

      (c) Publishing a copy of the notice three times, once each week for 3 consecutive weeks, in a newspaper of general circulation in the county where the property is situated or, if the property is a time share, by posting a copy of the notice on an Internet website and publishing a statement in a newspaper in the manner required by subsection 3 of NRS 119A.560; and

      (d) If the property is a residential foreclosure, complying with the provisions of NRS 107.087.

      5.  Every sale made under the provisions of this section and other sections of this chapter vests in the purchaser the title of the grantor and any successors in interest without equity or right of redemption. A sale made pursuant to this section must be declared void by any court of competent jurisdiction in the county where the sale took place if:

      (a) The trustee or other person authorized to make the sale does not substantially comply with the provisions of this section or any applicable provision of NRS [107.086 and] 107.087;

      (b) Except as otherwise provided in subsection 6, an action is commenced in the county where the sale took place within 45 days after the date of the sale; and

      (c) A notice of lis pendens providing notice of the pendency of the action is recorded in the office of the county recorder of the county where the sale took place within 15 days after commencement of the action.

      6.  If proper notice is not provided pursuant to subsection 3 or paragraph (a) of subsection 4 to the grantor, to the person who holds the title of record on the date the notice of default and election to sell is recorded, to each trustor or to any other person entitled to such notice, the person who did not receive such proper notice may commence an action pursuant to subsection 5 within 60 days after the date on which the person received actual notice of the sale.

      7.  If, in an action brought by the grantor or the person who holds title of record in the district court in and for the county in which the real property is located, the court finds that the beneficiary, the successor in interest of the beneficiary or the trustee did not comply with any requirement of subsection 2, 3 or 4, the court must award to the grantor or the person who holds title of record:

      (a) Damages of $5,000 or treble the amount of actual damages, whichever is greater;

      (b) An injunction enjoining the exercise of the power of sale until the beneficiary, the successor in interest of the beneficiary or the trustee complies with the requirements of subsections 2, 3 and 4; and

 


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      (c) Reasonable attorney’s fees and costs,

Ê unless the court finds good cause for a different award. The remedy provided in this subsection is in addition to the remedy provided in subsection 5.

      8.  The sale of a lease of a dwelling unit of a cooperative housing corporation vests in the purchaser title to the shares in the corporation which accompany the lease.

      9.  After a sale of property is conducted pursuant to this section, the trustee shall:

      (a) Within 30 days after the date of the sale, record the trustee’s deed upon sale in the office of the county recorder of the county in which the property is located; or

      (b) Within 20 days after the date of the sale, deliver the trustee’s deed upon sale to the successful bidder. Within 10 days after the date of delivery of the deed by the trustee, the successful bidder shall record the trustee’s deed upon sale in the office of the county recorder of the county in which the property is located.

      10.  If the successful bidder fails to record the trustee’s deed upon sale pursuant to paragraph (b) of subsection 9, the successful bidder:

      (a) Is liable in a civil action to any party that is a senior lienholder against the property that is the subject of the sale in a sum of up to $500 and for reasonable attorney’s fees and the costs of bringing the action; and

      (b) Is liable in a civil action for any actual damages caused by the failure to comply with the provisions of subsection 9 and for reasonable attorney’s fees and the costs of bringing the action.

      11.  The county recorder shall, in addition to any other fee, at the time of recording a notice of default and election to sell collect:

      (a) A fee of $150 for deposit in the State General Fund.

      (b) [A fee of $45 for deposit in the Account for Foreclosure Mediation, which is hereby created in the State General Fund. The Account must be administered by the Court Administrator, and the money in the Account may be expended only for the purpose of supporting a program of foreclosure mediation established by Supreme Court Rule.

      (c)] A fee of $5 to be paid over to the county treasurer on or before the fifth day of each month for the preceding calendar month. The county recorder may direct that 1.5 percent of the fees collected by the county recorder pursuant to this paragraph be transferred into a special account for use by the office of the county recorder. The county treasurer shall remit quarterly to the organization operating the program for legal services that receives the fees charged pursuant to NRS 19.031 for the operation of programs for the indigent all the money received from the county recorder pursuant to this paragraph.

      12.  The fees collected pursuant to [paragraphs] paragraph (a) [and (b)] of subsection 11 must be paid over to the county treasurer by the county recorder on or before the fifth day of each month for the preceding calendar month, and, except as otherwise provided in this subsection, must be placed to the credit of the State General Fund . [or the Account for Foreclosure Mediation as prescribed pursuant to subsection 11.] The county recorder may direct that 1.5 percent of the fees collected by the county recorder be transferred into a special account for use by the office of the county recorder. The county treasurer shall, on or before the 15th day of each month, remit the fees deposited by the county recorder pursuant to this subsection to the State Controller for credit to the State General Fund .

 


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the fees deposited by the county recorder pursuant to this subsection to the State Controller for credit to the State General Fund . [or the Account as prescribed in subsection 11.]

      13.  The beneficiary, the successor in interest of the beneficiary or the trustee who causes to be recorded the notice of default and election to sell shall not charge the grantor or the successor in interest of the grantor any portion of any fee required to be paid pursuant to subsection 11.

      14.  As used in this section:

      (a) “Owner-occupied housing” means housing that is occupied by an owner as the owner’s primary residence. The term does not include vacant land or any time share or other property regulated under chapter 119A of NRS.

      (b) “Residential foreclosure” means the sale of a single family residence under a power of sale granted by this section. As used in this paragraph, “single family residence”:

             (1) Means a structure that is comprised of not more than four units.

             (2) Does not include vacant land or any time share or other property regulated under chapter 119A of NRS.

      [(b)](c) “Trustee” means the trustee of record.

      Sec. 2. NRS 107.085 is hereby amended to read as follows:

      107.085  1.  With regard to a transfer in trust of an estate in real property to secure the performance of an obligation or the payment of a debt, the provisions of this section apply to the exercise of a power of sale pursuant to NRS 107.080 only if:

      (a) The trust agreement becomes effective on or after October 1, 2003, and, on the date the trust agreement is made, the trust agreement is subject to the provisions of § 152 of the Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1602(bb), and the regulations adopted by the Board of Governors of the Federal Reserve System pursuant thereto, including, without limitation, 12 C.F.R. § 226.32; or

      (b) The trust agreement concerns owner-occupied housing as defined in NRS [107.086.] 107.080.

      2.  The trustee shall not exercise a power of sale pursuant to NRS 107.080 unless:

      (a) In the manner required by subsection 3, not later than 60 days before the date of the sale, the trustee causes to be served upon the grantor or the person who holds the title of record a notice in the form described in subsection 3; and

      (b) If an action is filed in a court of competent jurisdiction claiming an unfair lending practice in connection with the trust agreement, the date of the sale is not less than 30 days after the date the most recent such action is filed.

      3.  The notice described in subsection 2 must be:

      (a) Served upon the grantor or the person who holds the title of record:

             (1) Except as otherwise provided in subparagraph (2), by personal service or, if personal service cannot be timely effected, in such other manner as a court determines is reasonably calculated to afford notice to the grantor or the person who holds the title of record; or

             (2) If the trust agreement concerns owner-occupied housing as defined in NRS [107.086:] 107.080:

                   (I) By personal service;

                   (II) If the grantor or the person who holds the title of record is absent from his or her place of residence or from his or her usual place of business, by leaving a copy with a person of suitable age and discretion at either place and mailing a copy to the grantor or the person who holds the title of record at his or her place of residence or place of business; or

 


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business, by leaving a copy with a person of suitable age and discretion at either place and mailing a copy to the grantor or the person who holds the title of record at his or her place of residence or place of business; or

                   (III) If the place of residence or business cannot be ascertained, or a person of suitable age or discretion cannot be found there, by posting a copy in a conspicuous place on the trust property, delivering a copy to a person there residing if the person can be found and mailing a copy to the grantor or the person who holds the title of record at the place where the trust property is situated; and

      (b) In substantially the following form, with the applicable telephone numbers and mailing addresses provided on the notice and, except as otherwise provided in subsection 4, a copy of the promissory note attached to the notice:

 

NOTICE

YOU ARE IN DANGER OF LOSING YOUR HOME!

 

Your home loan is being foreclosed. In not less than 60 days your home may be sold and you may be forced to move. For help, call:

 

Consumer Credit Counseling _______________

The Attorney General __________________

The Division of Mortgage Lending _____

The Division of Financial Institutions ________________

Legal Services ______________________

Your Lender ___________________

Nevada Fair Housing Center ________________

 

      4.  The trustee shall cause all social security numbers to be redacted from the copy of the promissory note before it is attached to the notice pursuant to paragraph (b) of subsection 3.

      5.  This section does not prohibit a judicial foreclosure.

      6.  As used in this section, “unfair lending practice” means an unfair lending practice described in NRS 598D.010 to 598D.150, inclusive.

      Sec. 2.5. NRS 107.086 is hereby amended to read as follows:

      107.086  1.  Except as otherwise provided in this subsection [,] and subsection 4 of section 1 of this act, in addition to the requirements of NRS 107.085, the exercise of the power of sale pursuant to NRS 107.080 with respect to any trust agreement which concerns owner-occupied housing and for which a notice of default and election to sell is mailed on or before December 1, 2016, to the grantor or the person who holds the title of record as required by subsection 3 of NRS 107.080 is subject to the provisions of this section. The provisions of this section do not apply to the exercise of the power of sale if the notice of default and election to sell recorded pursuant to subsection 2 of NRS 107.080 includes an affidavit and a certification indicating that, pursuant to NRS 107.130, an election has been made to use the expedited procedure for the exercise of the power of sale with respect to abandoned residential property.

      2.  The trustee shall not exercise a power of sale pursuant to NRS 107.080 unless the trustee:

 


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      (a) Includes with the notice of default and election to sell which is mailed to the grantor or the person who holds the title of record as required by subsection 3 of NRS 107.080:

             (1) Contact information which the grantor or the person who holds the title of record may use to reach a person with authority to negotiate a loan modification on behalf of the beneficiary of the deed of trust;

             (2) Contact information for at least one local housing counseling agency approved by the United States Department of Housing and Urban Development;

             (3) A notice provided by the Mediation Administrator indicating that the grantor or the person who holds the title of record will be enrolled to participate in mediation pursuant to this section if he or she pays to the Mediation Administrator his or her share of the fee established pursuant to subsection 11; and

             (4) A form upon which the grantor or the person who holds the title of record may indicate an election to waive mediation pursuant to this section and one envelope addressed to the trustee and one envelope addressed to the Mediation Administrator, which the grantor or the person who holds the title of record may use to comply with the provisions of subsection 3;

      (b) In addition to including the information described in paragraph (a) with the notice of default and election to sell which is mailed to the grantor or the person who holds the title of record as required by subsection 3 of NRS 107.080, provides to the grantor or the person who holds the title of record the information described in paragraph (a) concurrently with, but separately from, the notice of default and election to sell which is mailed to the grantor or the person who holds the title of record as required by subsection 3 of NRS 107.080;

      (c) Serves a copy of the notice upon the Mediation Administrator; and

      (d) Causes to be recorded in the office of the recorder of the county in which the trust property, or some part thereof, is situated:

             (1) The certificate provided to the trustee by the Mediation Administrator pursuant to subsection 4 or 7 which provides that no mediation is required in the matter; or

             (2) The certificate provided to the trustee by the Mediation Administrator pursuant to subsection 8 which provides that mediation has been completed in the matter.

      3.  If the grantor or the person who holds the title of record elects to waive mediation, he or she shall, not later than 30 days after service of the notice in the manner required by NRS 107.080 [,] or December 31, 2016, whichever is earlier, complete the form required by subparagraph (4) of paragraph (a) of subsection 2 and return the form to the trustee and the Mediation Administrator by certified mail, return receipt requested. If the grantor or the person who holds the title of record does not elect to waive mediation, he or she shall, not later than 30 days after the service of the notice in the manner required by NRS 107.080 [,] or December 31, 2016, whichever is earlier, pay to the Mediation Administrator his or her share of the fee established pursuant to subsection 11. Upon receipt of the share of the fee established pursuant to subsection 11 owed by the grantor or the person who holds title of record, the Mediation Administrator shall notify the trustee, by certified mail, return receipt requested, of the enrollment of the grantor or person who holds the title of record to participate in mediation pursuant to this section and shall assign the matter to a senior justice, judge, hearing master or other designee and schedule the matter for mediation.

 


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pursuant to this section and shall assign the matter to a senior justice, judge, hearing master or other designee and schedule the matter for mediation. The trustee shall notify the beneficiary of the deed of trust and every other person with an interest as defined in NRS 107.090, by certified mail, return receipt requested, of the enrollment of the grantor or the person who holds the title of record to participate in mediation. If the grantor or person who holds the title of record is enrolled to participate in mediation pursuant to this section, no further action may be taken to exercise the power of sale until the completion of the mediation.

      4.  If the grantor or the person who holds the title of record indicates on the form described in subparagraph (4) of paragraph (a) of subsection 2 an election to waive mediation or fails to pay to the Mediation Administrator his or her share of the fee established pursuant to subsection 11, as required by subsection 3, the Mediation Administrator shall, not later than 60 days after the Mediation Administrator receives the form indicating an election to waive mediation or 90 days after the service of the notice in the manner required by NRS 107.080, whichever is earlier, provide to the trustee a certificate which provides that no mediation is required in the matter.

      5.  Each mediation required by this section must be conducted by a senior justice, judge, hearing master or other designee pursuant to the rules adopted pursuant to subsection 11. The beneficiary of the deed of trust or a representative shall attend the mediation. The grantor or his or her representative, or the person who holds the title of record or his or her representative, shall attend the mediation. The beneficiary of the deed of trust shall bring to the mediation the original or a certified copy of the deed of trust, the mortgage note and each assignment of the deed of trust or mortgage note. If the beneficiary of the deed of trust is represented at the mediation by another person, that person must have authority to negotiate a loan modification on behalf of the beneficiary of the deed of trust or have access at all times during the mediation to a person with such authority.

      6.  If the beneficiary of the deed of trust or the representative fails to attend the mediation, fails to participate in the mediation in good faith or does not bring to the mediation each document required by subsection 5 or does not have the authority or access to a person with the authority required by subsection 5, the mediator shall prepare and submit to the Mediation Administrator a petition and recommendation concerning the imposition of sanctions against the beneficiary of the deed of trust or the representative. The court may issue an order imposing such sanctions against the beneficiary of the deed of trust or the representative as the court determines appropriate, including, without limitation, requiring a loan modification in the manner determined proper by the court.

      7.  If the grantor or the person who holds the title of record is enrolled to participate in mediation pursuant to this section but fails to attend the mediation, the Mediation Administrator shall, not later than 30 days after the scheduled mediation, provide to the trustee a certificate which states that no mediation is required in the matter.

      8.  If the mediator determines that the parties, while acting in good faith, are not able to agree to a loan modification, the mediator shall prepare and submit to the Mediation Administrator a recommendation that the matter be terminated. The Mediation Administrator shall, not later than 30 days after submittal of the mediator’s recommendation that the matter be terminated, provide to the trustee a certificate which provides that the mediation required by this section has been completed in the matter.

 


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provide to the trustee a certificate which provides that the mediation required by this section has been completed in the matter.

      9.  Upon receipt of the certificate provided to the trustee by the Mediation Administrator pursuant to subsection 4, 7 or 8, if the property is located within a common-interest community, the trustee shall notify the unit-owners’ association organized under NRS 116.3101 of the existence of the certificate.

      10.  During the pendency of any mediation pursuant to this section, a unit’s owner must continue to pay any obligation, other than any past due obligation.

      11.  The Supreme Court shall adopt rules necessary to carry out the provisions of this section. The rules must, without limitation, include provisions:

      (a) Designating an entity to serve as the Mediation Administrator pursuant to this section. The entities that may be so designated include, without limitation, the Administrative Office of the Courts, the district court of the county in which the property is situated or any other judicial entity.

      (b) Ensuring that mediations occur in an orderly and timely manner.

      (c) Requiring each party to a mediation to provide such information as the mediator determines necessary.

      (d) Establishing procedures to protect the mediation process from abuse and to ensure that each party to the mediation acts in good faith.

      (e) Establishing a total fee of not more than $400 that may be charged and collected by the Mediation Administrator for mediation services pursuant to this section and providing that the responsibility for payment of the fee must be shared equally by the parties to the mediation.

      12.  Except as otherwise provided in subsection 14, the provisions of this section do not apply if:

      (a) The grantor or the person who holds the title of record has surrendered the property, as evidenced by a letter confirming the surrender or delivery of the keys to the property to the trustee, the beneficiary of the deed of trust or the mortgagee, or an authorized agent thereof; or

      (b) A petition in bankruptcy has been filed with respect to the grantor or the person who holds the title of record under chapter 7, 11, 12 or 13 of Title 11 of the United States Code and the bankruptcy court has not entered an order closing or dismissing the case or granting relief from a stay of foreclosure.

      13.  A noncommercial lender is not excluded from the application of this section.

      14.  The Mediation Administrator and each mediator who acts pursuant to this section in good faith and without gross negligence are immune from civil liability for those acts.

      15.  As used in this section:

      (a) “Common-interest community” has the meaning ascribed to it in NRS 116.021.

      (b) “Mediation Administrator” means the entity so designated pursuant to subsection 11.

      (c) “Noncommercial lender” means a lender which makes a loan secured by a deed of trust on owner-occupied housing and which is not a bank, financial institution or other entity regulated pursuant to title 55 or 56 of NRS.

      (d) “Obligation” has the meaning ascribed to it in NRS 116.310313.

 


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      (e) “Owner-occupied housing” means housing that is occupied by an owner as the owner’s primary residence. The term does not include vacant land or any time share or other property regulated under chapter 119A of NRS.

      (f) “Unit’s owner” has the meaning ascribed to it in NRS 116.095.

      Sec. 3. NRS 107.095 is hereby amended to read as follows:

      107.095  1.  The notice of default required by NRS 107.080 must also be sent by registered or certified mail, return receipt requested and with postage prepaid, to each guarantor or surety of the debt. If the address of the guarantor or surety is unknown, the notice must be sent to the address of the trust property. Failure to give the notice, except as otherwise provided in subsection 3, releases the guarantor or surety from his or her obligation to the beneficiary, but does not affect the validity of a sale conducted pursuant to NRS 107.080 or the obligation of any guarantor or surety to whom the notice was properly given.

      2.  Failure to give the notice of default required by NRS 107.090, except as otherwise provided in subsection 3, releases the obligation to the beneficiary of any person who has complied with NRS 107.090 and who is or may otherwise be held liable for the debt or other obligation secured by the deed of trust, but such a failure does not affect the validity of a sale conducted pursuant to NRS 107.080 or the obligation of any person to whom the notice was properly given pursuant to this section or to NRS 107.080 or 107.090.

      3.  A guarantor, surety or other obligor is not released pursuant to this section if:

      (a) The required notice is given at least 15 days before the later of:

             (1) The expiration of the 15- or 35-day period described in paragraph (a) of subsection 2 of NRS 107.080;

             (2) In the case of any trust agreement which concerns owner-occupied housing as defined in NRS [107.086,] 107.080, the expiration of the period described in paragraph (b) of subsection 2 of NRS 107.080; or

             (3) Any extension of the applicable period by the beneficiary; or

      (b) The notice is rescinded before the sale is advertised.

      Sec. 4. NRS 107.450 is hereby amended to read as follows:

      107.450  “Residential mortgage loan” means a loan which is primarily for personal, family or household use and which is secured by a mortgage or deed of trust on owner-occupied housing as defined in NRS [107.086.] 107.080.

      Sec. 5. NRS 107.460 is hereby amended to read as follows:

      107.460  The provisions of NRS 107.400 to 107.560, inclusive, do not apply to a financial institution, as defined in NRS 660.045, that, during its immediately preceding annual reporting period, as established with its primary regulator, has foreclosed on 100 or fewer real properties located in this State which constitute owner-occupied housing, as defined in NRS [107.086.] 107.080.

      Sec. 6. NRS 107.480 is hereby amended to read as follows:

      107.480  1.  In addition to the requirements of NRS 107.085 , [and 107.086,] the exercise of a trustee’s power of sale pursuant to NRS 107.080 with respect to a deed of trust securing a residential mortgage loan is subject to the provisions of NRS 107.400 to 107.560, inclusive.

      2.  In addition to the requirements of NRS 40.430 to 40.4639, inclusive, a civil action for a foreclosure sale pursuant to NRS 40.430 involving a failure to make a payment required by a residential mortgage loan is subject to the requirements of NRS 107.400 to 107.560, inclusive.

 


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failure to make a payment required by a residential mortgage loan is subject to the requirements of NRS 107.400 to 107.560, inclusive.

      Sec. 7. NRS 107.550 is hereby amended to read as follows:

      107.550  1.  A civil action for a foreclosure sale pursuant to NRS 40.430 involving a failure to make a payment required by a residential mortgage loan must be dismissed without prejudice, any notice of default and election to sell recorded pursuant to subsection 2 of NRS 107.080 or any notice of sale recorded pursuant to subsection 4 of NRS 107.080 must be rescinded, and any pending foreclosure sale must be cancelled, if:

      (a) The borrower accepts a permanent foreclosure prevention alternative;

      (b) A notice of sale is not recorded within 9 months after the notice of default and election to sell is recorded pursuant to subsection 2 of NRS 107.080; or

      (c) A foreclosure sale is not conducted within 90 calendar days after a notice of sale is recorded pursuant to subsection 4 of NRS 107.080.

      2.  The periods specified in paragraphs (b) and (c) of subsection 1 are tolled:

      (a) If a borrower has filed a case under 11 U.S.C. Chapter 7, 11, 12 or 13, until the bankruptcy court enters an order closing or dismissing the bankruptcy case or granting relief from a stay of foreclosure or trustee’s sale;

      (b) [If mediation pursuant to NRS 107.086 is required, until the date on which the Mediation Administrator, as defined in NRS 107.086, issues the certificate that mediation has been completed in the matter;

      (c)] If [mediation pursuant to NRS 40.437 is required or if] a court orders participation in a settlement program, until the date on which the [mediation or] participation in a settlement program is terminated; or

      [(d)](c) If a borrower has submitted an application for a foreclosure prevention alternative, until the date on which:

             (1) A written offer for a foreclosure prevention alternative is submitted to the borrower;

             (2) A written statement of the denial of the application has been submitted to the borrower pursuant to subsection 4 of NRS 107.530, and any appeal period pursuant to subsection 5 of NRS 107.530 has expired; or

             (3) If the borrower has appealed the denial of an application for a foreclosure prevention alternative, a written offer for a foreclosure prevention alternative or a written denial of the appeal is submitted to the borrower.

      3.  If, pursuant to subsection 1, a civil action is dismissed, a notice of default and election to sell recorded pursuant to subsection 2 of NRS 107.080 or any notice of sale recorded pursuant to subsection 4 of NRS 107.080 is rescinded, or any pending foreclosure sale is cancelled, the mortgagee or beneficiary of the deed of trust is thereupon restored to its former position and has the same rights as though an action for a judicial foreclosure had not been commenced or a notice of default and election to sell had not been recorded.

      Sec. 8. NRS 2.125 is hereby amended to read as follows:

      2.125  The Supreme Court may adopt rules providing for voluntary mediation with respect to [:

      1.  A homeowner who is not in default but is at risk of default.

      2.  A] a small business whose commercial property is in default. If the Supreme Court adopts such rules, the Supreme Court shall consider:

 


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      [(a)]1.  The goals and purposes of the mediation process;

      [(b)]2.  The necessity, efficiency and desirability of allowing mediation for the various types of commercial property; and

      [(c)]3.  Any other factor that is relevant in determining whether allowing mediation under the circumstances is in the best interests of the residents, businesses and governmental entities in this State.

      Sec. 8.5. NRS 40.437 is hereby amended to read as follows:

      40.437  1.  [If a] A civil action for a foreclosure sale pursuant to NRS 40.430 affecting owner-occupied housing that is commenced in a court of competent jurisdiction [:] on or before December 1, 2016, is subject to the provisions of this section.

      2.  In a civil action described in subsection 1:

      (a) The copy of the complaint served on the mortgagor must include a separate document containing:

             (1) Contact information which the mortgagor may use to reach a person with authority to negotiate a loan modification on behalf of the plaintiff;

             (2) Contact information for at least one local housing counseling agency approved by the United States Department of Housing and Urban Development;

             (3) A notice provided by the Mediation Administrator indicating that the mortgagor has the right to seek mediation pursuant to this section; and

             (4) A form upon which the mortgagor may indicate an election to enter into mediation or to waive mediation pursuant to this section and one envelope addressed to the plaintiff and one envelope addressed to the Mediation Administrator, which the mortgagor may use to comply with the provisions of subsection [2;] 3; and

      (b) The plaintiff must submit a copy of the complaint to the Mediation Administrator.

      [2.]3.  The mortgagor shall, not later than the date on which an answer to the complaint is due [,] or December 31, 2016, whichever is earlier, complete the form required by subparagraph (4) of paragraph (a) of subsection [1] 2 and file the form with the court and return a copy of the form to the plaintiff by certified mail, return receipt requested. If the mortgagor indicates on the form an election to enter into mediation, the plaintiff shall notify any person with an interest as defined in NRS 107.090, by certified mail, return receipt requested, of the election of the mortgagor to enter into mediation and file the form with the Mediation Administrator, who shall assign the matter to a senior justice, judge, hearing master or other designee and schedule the matter for mediation. The judicial foreclosure action must be stayed until the completion of the mediation. If the mortgagor indicates on the form an election to waive mediation or fails to file the form with the court and return a copy of the form to the plaintiff as required by this subsection, no mediation is required in the action.

      [3.]4.  Each mediation required by this section must be conducted by a senior justice, judge, hearing master or other designee pursuant to the rules adopted pursuant to subsection 11 of NRS 107.086. The plaintiff or a representative, and the mortgagor or his or her representative, shall attend the mediation. If the plaintiff is represented at the mediation by another person, that person must have authority to negotiate a loan modification on behalf of the plaintiff or have access at all times during the mediation to a person with such authority.

 


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      [4.]5.  If the plaintiff or the representative fails to attend the mediation, fails to participate in the mediation in good faith or does not have the authority or access to a person with the authority required by subsection [3,] 4, the mediator shall prepare and submit to the Mediation Administrator and the court a petition and recommendation concerning the imposition of sanctions against the plaintiff or the representative. The court may issue an order imposing such sanctions against the plaintiff or the representative as the court determines appropriate, including, without limitation, requiring a loan modification in the manner determined proper by the court.

      [5.]6.  If the mortgagor elected to enter into mediation and fails to attend the mediation, no mediation is required and the judicial foreclosure action must proceed as if the mortgagor had not elected to enter into mediation.

      [6.]7.  If the mediator determines that the parties, while acting in good faith, are not able to agree to a loan modification, the mediator shall prepare and submit to the court and the Mediation Administrator a recommendation that the mediation be terminated. The court may terminate the mediation and proceed with the judicial foreclosure action.

      [7.]8.  The rules adopted by the Supreme Court pursuant to subsection 11 of NRS 107.086 apply to a mediation conducted pursuant to this section, and the Supreme Court may adopt any additional rules necessary to carry out the provisions of this section.

      [8.]9.  Except as otherwise provided in subsection [10,] 11, the provisions of this section do not apply if:

      (a) The mortgagor has surrendered the property, as evidenced by a letter confirming the surrender or delivery of the keys to the property to the trustee, the beneficiary of the deed of trust or the mortgagee, or an authorized agent thereof; or

      (b) A petition in bankruptcy has been filed with respect to the defendant under 11 U.S.C. Chapter 7, 11, 12 or 13 and the bankruptcy court has not entered an order closing or dismissing the case or granting relief from a stay of foreclosure.

      [9.]10.  A noncommercial lender is not excluded from the application of this section.

      [10.]11.  The Mediation Administrator and each mediator who acts pursuant to this section in good faith and without gross negligence are immune from civil liability for those acts.

      [11.]12.  As used in this section:

      (a) “Mediation Administrator” has the meaning ascribed to it in NRS 107.086.

      (b) “Noncommercial lender” has the meaning ascribed to it in NRS 107.086.

      (c) “Owner-occupied housing” has the meaning ascribed to it in NRS 107.086.

      Sec. 9. Section 2 of Senate Bill 306 of this session is hereby amended to read as follows:

       Sec. 2.  NRS 116.31162 is hereby amended to read as follows:

       116.31162  1.  Except as otherwise provided in subsection 5 [, 6] or [7,] 6, in a condominium, in a planned community, in a cooperative where the owner’s interest in a unit is real estate under NRS 116.1105, or in a cooperative where the owner’s interest in a unit is personal property under NRS 116.1105 and the declaration provides that a lien may be foreclosed under NRS 116.31162 to 116.31168, inclusive, the association may foreclose its lien by sale after all of the following occur:

 


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provides that a lien may be foreclosed under NRS 116.31162 to 116.31168, inclusive, the association may foreclose its lien by sale after all of the following occur:

       (a) The association has mailed by certified or registered mail, return receipt requested, to the unit’s owner or his or her successor in interest, at his or her address, if known, and at the address of the unit, a notice of delinquent assessment which states the amount of the assessments and other sums which are due in accordance with subsection 1 of NRS 116.3116, a description of the unit against which the lien is imposed and the name of the record owner of the unit.

       (b) Not less than 30 days after mailing the notice of delinquent assessment pursuant to paragraph (a), the association or other person conducting the sale has executed and caused to be recorded, with the county recorder of the county in which the common-interest community or any part of it is situated, a notice of default and election to sell the unit to satisfy the lien which must contain the same information as the notice of delinquent assessment and which must also comply with the following:

             (1) Describe the deficiency in payment.

             (2) State the total amount of the deficiency in payment, with a separate statement of:

                   (I) The amount of the association’s lien that is prior to the first security interest on the unit pursuant to subsection 3 of NRS 116.3116 as of the date of the notice;

                   (II) The amount of the lien described in sub-subparagraph (I) that is attributable to assessments based on the periodic budget adopted by the association pursuant to NRS 116.3115 as of the date of the notice;

                   (III) The amount of the lien described in sub-subparagraph (I) that is attributable to amounts described in NRS 116.310312 as of the date of the notice; and

                   (IV) The amount of the lien described in sub-subparagraph (I) that is attributable to the costs of enforcing the association’s lien as of the date of the notice.

             (3) State that:

                   (I) If the holder of the first security interest on the unit does not satisfy the amount of the association’s lien that is prior to that first security interest pursuant to subsection 3 of NRS 116.3116, the association may foreclose its lien by sale and that the sale may extinguish the first security interest as to the unit; and

                   (II) If, not later than 5 days before the date of the sale, the holder of the first security interest on the unit satisfies the amount of the association’s lien that is prior to that first security interest pursuant to subsection 3 of NRS 116.3116 and, not later than 2 days before the date of the sale, a record of such satisfaction is recorded in the office of the recorder of the county in which the unit is located, the association may foreclose its lien by sale but the sale may not extinguish the first security interest as to the unit.

             (4) State the name and address of the person authorized by the association to enforce the lien by sale.

             (5) Contain, in 14-point bold type, the following warning:

 


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WARNING! IF YOU FAIL TO PAY THE AMOUNT SPECIFIED IN THIS NOTICE, YOU COULD LOSE YOUR HOME, EVEN IF THE AMOUNT IS IN DISPUTE!

 

       (c) The unit’s owner or his or her successor in interest has failed to pay the amount of the lien, including costs, fees and expenses incident to its enforcement, for 90 days following the recording of the notice of default and election to sell.

       (d) The unit’s owner or his or her successor in interest, or the holder of a recorded security interest on the unit, has, for a period which commences in the manner and subject to the requirements described in subsection 3 and which expires 5 days before the date of sale, failed to pay the assessments and other sums that are due to the association in accordance with subsection 1 of NRS 116.3116.

       (e) The association or other person conducting the sale has executed and caused to be recorded, with the county recorder of the county in which the common-interest community or any part of it is situated, an affidavit which states, based on the direct, personal knowledge of the affiant, the personal knowledge which the affiant acquired by a review of a trustee sale guarantee or a similar product or the personal knowledge which the affiant acquired by a review of the business records of the association or other person conducting the sale, which business records must meet the standards set forth in NRS 51.135, the following:

             (1) The name of each holder of a security interest on the unit to which the notice of default and election to sell and the notice of sale was mailed, as required by subsection 2 of NRS 116.31163 and paragraph (d) of subsection 1 of NRS 116.311635; and

             (2) The address at which the notices were mailed to each such holder of a security interest.

       2.  The notice of default and election to sell must be signed by the person designated in the declaration or by the association for that purpose or, if no one is designated, by the president of the association.

       3.  The period of 90 days described in paragraph (c) of subsection 1 begins on the first day following:

       (a) The date on which the notice of default and election to sell is recorded; or

       (b) The date on which a copy of the notice of default and election to sell is mailed by certified or registered mail, return receipt requested, to the unit’s owner or his or her successor in interest at his or her address, if known, and at the address of the unit,

Ê whichever date occurs later.

       4.  An association may not mail to a unit’s owner or his or her successor in interest a letter of its intent to mail a notice of delinquent assessment pursuant to paragraph (a) of subsection 1, mail the notice of delinquent assessment or take any other action to collect a past due obligation from a unit’s owner or his or her successor in interest unless:

       (a) Not earlier than 60 days after the obligation becomes past due, the association mails to the address on file for the unit’s owner:

             (1) A schedule of the fees that may be charged if the unit’s owner fails to pay the past due obligation;

 


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             (2) A proposed repayment plan; and

             (3) A notice of the right to contest the past due obligation at a hearing before the executive board and the procedures for requesting such a hearing; and

       (b) Within 30 days after the date on which the information described in paragraph (a) is mailed, the past due obligation has not been paid in full or the unit’s owner or his or her successor in interest has not entered into a repayment plan or requested a hearing before the executive board. If the unit’s owner or his or her successor in interest requests a hearing or enters into a repayment plan within 30 days after the date on which the information described in paragraph (a) is mailed and is unsuccessful at the hearing or fails to make a payment under the repayment plan within 10 days after the due date, the association may take any lawful action pursuant to subsection 1 to enforce its lien.

       5.  The association may not foreclose a lien by sale if the association has not mailed a copy of the notice of default and election to sell and a copy of the notice of sale to each holder of a security interest on the unit in the manner and subject to the requirements set forth in subsection 2 of NRS 116.31163 and paragraph (d) of subsection 1 of 116.311635.

       6.  The association may not foreclose a lien by sale based on a fine or penalty for a violation of the governing documents of the association unless:

       (a) The violation poses an imminent threat of causing a substantial adverse effect on the health, safety or welfare of the units’ owners or residents of the common-interest community; or

       (b) The penalty is imposed for failure to adhere to a schedule required pursuant to NRS 116.310305.

       [7.  The association may not foreclose a lien by sale if the association has received notice pursuant to NRS 107.086 that the unit is subject to foreclosure mediation pursuant to that section, unless:

       (a) The trustee of record has recorded the certificate provided to the trustee pursuant to subparagraph (1) or (2) of paragraph (e) of subsection 2 of NRS 107.086; or

       (b) The unit’s owner has failed to pay to the association any amounts enforceable as assessments pursuant to subsection 1 of NRS 116.3116 that become due during the pendency of foreclosure mediation pursuant to NRS 107.086, other than past due obligations as described in subsection 10 of NRS 107.086.]

      Sec. 10.  Section 8.5 of Senate Bill 306 of this session is hereby amended to read as follows:

       Sec. 8.5.  Chapter 657 of NRS is hereby amended by adding thereto a new section to read as follows:

       1.  A bank, credit union, savings bank, savings and loan association, thrift company or other financial institution which is licensed, registered or otherwise authorized to do business in this State and which is the mortgagee or beneficiary of a deed of trust under a residential mortgage loan shall provide to the Division of Financial Institutions the name, street address and any other contact information of a person to whom [:

 


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       (a) A borrower or a representative of a borrower must send any document, record or notification necessary to facilitate a mediation conducted pursuant to NRS 40.437 or 107.086.

       (b) A] a unit-owners’ association must send any notice required to be given pursuant to NRS 116.3116 to 116.31168, inclusive.

       2.  The Division of Financial Institutions shall maintain on its Internet website the information provided to the Division pursuant to subsection 1 and provide a prominent display of, or a link to, the information described in subsection 1, on the home page of its Internet website.

       3.  As used in this section [:

       (a) “Borrower” means a person who is a mortgagor or grantor of a deed of trust under a residential mortgage loan.

       (b) “Residential] , “residential mortgage loan” means a loan which is primarily for personal, family or household use and which is secured by a mortgage or deed of trust on owner-occupied housing as defined in NRS [107.086.] 107.080.

      Sec. 10.5.  If the Court Administrator determines that money in the Account for Foreclosure Mediation created by NRS 107.080 is not sufficient to support the mediation process set forth in NRS 107.086, as amended by section 2.5 of this act, and the mediation process set forth in section 1 of this act, the Court Administrator may submit to the Interim Finance Committee a request for an allocation from the Contingency Account created by NRS 353.266 for deposit in the Account for Foreclosure Mediation for such purpose.

      Sec. 11.  Any balance remaining in the Account for Foreclosure Mediation created by NRS 107.080 that has not been committed for expenditure before June 30, 2017, must be reverted to the State General Fund.

      Sec. 12. NRS 40.437 and 107.086 are hereby repealed.

      Sec. 13.  1.  This section and sections 2.5, 8.5, 10.5 and 11 of this act become effective upon passage and approval.

      2.  Section 1 of this act becomes effective upon passage and approval and expires by limitation on June 30, 2017.

      3.  Sections 1.5, 2, 3 to 8, inclusive, 9, 10 and 12 of this act become effective on June 30, 2017.

      4.  Section 10.5 of this act expires by limitation on June 30, 2017.

________

 


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CHAPTER 518, SB 453

Senate Bill No. 453–Committee on Judiciary

 

CHAPTER 518

 

[Approved: June 10, 2015]

 

AN ACT relating to real property; revising provisions relating to the “one action rule” for recovery of a debt secured by a mortgage or lien on real property; revising provisions governing certain actions to enforce an obligation or debt secured by a mortgage or deed of trust; revising provisions governing the election to participate in mediation in a judicial foreclosure action; revising provisions governing deficiency judgments; and providing other matters properly relating thereto.

Legislative Counsel’s Digest:

      Existing law contains various provisions governing the enforcement of loans secured by deeds of trust or mortgages on real property, including, without limitation, provisions governing actions for the foreclosure of mortgages or deeds of trust, the conduct of foreclosure sales and the award of deficiency judgments, actions by holders of junior mortgages after foreclosure sales, the maintenance of property acquired at a foreclosure sale and the guarantors and sureties. (NRS 40.430-40.495) This bill revises these provisions of existing law.

      Sections 2-5 and 16 of this bill transfer the definitions of various terms to new sections and apply these definitions to all provisions of existing law governing the enforcement of loans secured by deeds of trust or mortgages on real property. Sections 8-15 of this bill make conforming changes so that the defined terms appear in the appropriate provisions of existing law.

      Existing law contains the “one action rule,” which generally provides there may be only one action for the recovery of a debt, or the enforcement of a right, secured by a mortgage or other lien on real property, and that the action must be for the foreclosure of the real property securing the debt or obligation. (NRS 40.430) Section 5.5 of this bill specifically provides that this rule is not applicable to an action for declaratory relief to ascertain the identity of the person who is entitled to enforce an instrument evidencing a debt or obligation secured by a mortgage or other lien on real property.

      Existing law provides that in a judicial foreclosure action concerning owner-occupied property, the mortgagor may elect to participate in the Foreclosure Mediation Program. (NRS 40.437) Section 6 of this bill incorporates in this provision the statutory changes made to the Foreclosure Mediation Program during the 2013 Legislative Session, and clarifies that a mortgagor, a grantor of a deed of trust or the person who holds title of record may enroll in the Program when a judicial foreclosure action is filed against him or her.

      Section 7 of this bill revises the language of the provision of existing law governing the disposition of surplus money after a foreclosure sale to clarify the language and use terms that are defined in existing law.

      Under existing law, to obtain a deficiency judgment after a foreclosure sale, a creditor must file an application with the court within 6 months after the date of the foreclosure sale. (NRS 40.455) Existing law further provides that in certain circumstances a creditor may bring an action against a guarantor, surety or other obligor who is not the borrower to enforce the obligation to pay, satisfy or purchase all or part of the obligation secured by a mortgage or lien on real property. (NRS 40.495) Section 8 provides that the complaint or other pleading in this action constitutes the application for a deficiency judgment and, thus, the creditor is not required to file an application for a deficiency judgment after the foreclosure sale.

      Existing law contains two sections which require a person who purchases or acquires vacant residential property at a foreclosure sale to maintain the property in accordance with certain standards. (NRS 40.464, 107.110) Sections 12 and 16 combine these provisions into one section.

 


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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

      Section 1. Chapter 40 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 5, inclusive, of this act.

      Sec. 2. As used in NRS 40.430 to 40.495, inclusive, and sections 3, 4 and 5 of this act, unless the context otherwise requires, the words and terms defined in sections 3, 4 and 5 of this act have the meanings ascribed to them in those sections.

      Sec. 3. “Foreclosure sale” means the sale of real property to enforce an obligation secured by a mortgage or lien on the property, including the exercise of a trustee’s power of sale pursuant to NRS 107.080.

      Sec. 4. “Mortgage or other lien” includes a deed of trust, but does not include a lien which arises pursuant to chapter 108 of NRS, pursuant to an assessment under chapter 116, 116B, 117, 119A or 278A of NRS or pursuant to a judgment or decree of any court of competent jurisdiction.

      Sec. 5. “Sale in lieu of a foreclosure sale” means a sale of real property pursuant to an agreement between a person to whom an obligation secured by a mortgage or other lien on real property is owed and the debtor of that obligation in which the sales price of the real property is insufficient to pay the full outstanding balance of the obligation and the costs of the sale. The term includes, without limitation, a deed in lieu of a foreclosure sale.

      Sec. 5.5. NRS 40.430 is hereby amended to read as follows:

      40.430  1.  Except in cases where a person proceeds under subsection 2 of NRS 40.495 or subsection 1 of NRS 40.512, and except as otherwise provided in NRS 118C.220, there may be but one action for the recovery of any debt, or for the enforcement of any right secured by a mortgage or other lien upon real estate. That action must be in accordance with the provisions of NRS 40.430 to 40.459, inclusive [.] , and sections 3, 4 and 5 of this act. In that action, the judgment must be rendered for the amount found due the plaintiff, and the court, by its decree or judgment, may direct a sale of the encumbered property, or such part thereof as is necessary, and apply the proceeds of the sale as provided in NRS 40.462.

      2.  This section must be construed to permit a secured creditor to realize upon the collateral for a debt or other obligation agreed upon by the debtor and creditor when the debt or other obligation was incurred.

      3.  At any time not later than 5 business days before the date of sale directed by the court, if the deficiency resulting in the action for the recovery of the debt has arisen by failure to make a payment required by the mortgage or other lien, the deficiency may be made good by payment of the deficient sum and by payment of any costs, fees and expenses incident to making the deficiency good. If a deficiency is made good pursuant to this subsection, the sale may not occur.

      4.  A sale directed by the court pursuant to subsection 1 must be conducted in the same manner as the sale of real property upon execution, by the sheriff of the county in which the encumbered land is situated, and if the encumbered land is situated in two or more counties, the court shall direct the sheriff of one of the counties to conduct the sale with like proceedings and effect as if the whole of the encumbered land were situated in that county.

 


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the sheriff of one of the counties to conduct the sale with like proceedings and effect as if the whole of the encumbered land were situated in that county.

      5.  Within 30 days after a sale of property is conducted pursuant to this section, the sheriff who conducted the sale shall record the sale of the property in the office of the county recorder of the county in which the property is located.

      6.  As used in this section, an “action” does not include any act or proceeding:

      (a) To appoint a receiver for, or obtain possession of, any real or personal collateral for the debt or as provided in NRS 32.015.

      (b) To enforce a security interest in, or the assignment of, any rents, issues, profits or other income of any real or personal property.

      (c) To enforce a mortgage or other lien upon any real or personal collateral located outside of the State which does not, except as required under the laws of that jurisdiction, result in a personal judgment against the debtor.

      (d) For the recovery of damages arising from the commission of a tort, including a recovery under NRS 40.750, or the recovery of any declaratory or equitable relief.

      (e) For the exercise of a power of sale pursuant to NRS 107.080.

      (f) For the exercise of any right or remedy authorized by chapter 104 of NRS or by the Uniform Commercial Code as enacted in any other state [.] , including, without limitation, an action for declaratory relief pursuant to chapter 30 of NRS to ascertain the identity of the person who is entitled to enforce an instrument pursuant to NRS 104.3309.

      (g) For the exercise of any right to set off, or to enforce a pledge in, a deposit account pursuant to a written agreement or pledge.

      (h) To draw under a letter of credit.

      (i) To enforce an agreement with a surety or guarantor if enforcement of the mortgage or other lien has been automatically stayed pursuant to 11 U.S.C. § 362 or pursuant to an order of a federal bankruptcy court under any other provision of the United States Bankruptcy Code for not less than 120 days following the mailing of notice to the surety or guarantor pursuant to subsection 1 of NRS 107.095.

      (j) To collect any debt, or enforce any right, secured by a mortgage or other lien on real property if the property has been sold to a person other than the creditor to satisfy, in whole or in part, a debt or other right secured by a senior mortgage or other senior lien on the property.

      (k) Relating to any proceeding in bankruptcy, including the filing of a proof of claim, seeking relief from an automatic stay and any other action to determine the amount or validity of a debt.

      (l) For filing a claim pursuant to chapter 147 of NRS or to enforce such a claim which has been disallowed.

      (m) Which does not include the collection of the debt or realization of the collateral securing the debt.

      (n) Pursuant to NRS 40.507 or 40.508.

      (o) Pursuant to an agreement entered into pursuant to NRS 361.7311 between an owner of the property and the assignee of a tax lien against the property, or an action which is authorized by NRS 361.733.

      (p) Which is exempted from the provisions of this section by specific statute.

 


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      (q) To recover costs of suit, costs and expenses of sale, attorneys’ fees and other incidental relief in connection with any action authorized by this subsection.

      Sec. 6. NRS 40.437 is hereby amended to read as follows:

      40.437  1.  If [a civil] an action [for a foreclosure sale] pursuant to NRS 40.430 affecting owner-occupied housing is commenced in a court of competent jurisdiction:

      (a) The copy of the complaint served on the mortgagor must include a separate document containing:

             (1) Contact information which the mortgagor may use to reach a person with authority to negotiate a loan modification on behalf of the plaintiff;

             (2) Contact information for at least one local housing counseling agency approved by the United States Department of Housing and Urban Development;

             (3) A notice provided by the Mediation Administrator indicating that the mortgagor [has the right] will be enrolled to [seek] participate in mediation pursuant to this section [;] if he or she pays to the Mediation Administrator his or her share of the fee established pursuant to subsection 11 of NRS 107.086; and

             (4) A form upon which the mortgagor may indicate an election to enter into mediation or to waive mediation pursuant to this section and one envelope addressed to the plaintiff and one envelope addressed to the Mediation Administrator, which the mortgagor may use to comply with the provisions of subsection 2; and

      (b) The plaintiff must submit a copy of the complaint to the Mediation Administrator.

      2.  [The] If the mortgagor elects to waive mediation, he or she shall, not later than the date on which an answer to the complaint is due, complete the form required by subparagraph (4) of paragraph (a) of subsection 1 and file the form with the court and return a copy of the form to the plaintiff by certified mail, return receipt requested. If the mortgagor [indicates on the form an election] does not elect to [enter into] waive mediation, he or she shall, not later than the date on which an answer to the complaint is due, pay to the Mediation Administrator his or her share of the fee established pursuant to subsection 11 of NRS 107.086. Upon receipt of the share of the fee established pursuant to subsection 11 of NRS 107.086 owed by the mortgagor, the Mediation Administrator shall notify the plaintiff, by certified mail, return receipt requested, of the enrollment of the mortgagor to participate in mediation pursuant to this section and shall assign the matter to a senior justice, judge, hearing master or other designee and schedule the matter for mediation. Upon the plaintiff’s receipt of such notice, the plaintiff shall notify any person with an interest as defined in NRS 107.090, by certified mail, return receipt requested, of the election of the mortgagor to [enter into mediation and file the form with the Mediation Administrator, who shall assign the matter to a senior justice, judge, hearing master or other designee and schedule the matter for] participate in mediation. The judicial foreclosure action must be stayed until the completion of the mediation. If the mortgagor indicates on the form [an] required by subparagraph (4) of paragraph (a) of subsection 1 of his or her election to waive mediation or fails to [file the form with the court and return a copy of the form to the plaintiff] pay the Mediation Administrator his or her share of the fee established pursuant to subsection 11 of NRS 107.086, as required by this subsection, no mediation is required in the action [.]

 


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her share of the fee established pursuant to subsection 11 of NRS 107.086, as required by this subsection, no mediation is required in the action [.] and the action pursuant to NRS 40.430 must proceed.

      3.  Each mediation required by this section must be conducted by a senior justice, judge, hearing master or other designee pursuant to the rules adopted pursuant to subsection 11 of NRS 107.086. The plaintiff or a representative, and the mortgagor or his or her representative, shall attend the mediation. If the plaintiff is represented at the mediation by another person, that person must have authority to negotiate a loan modification on behalf of the plaintiff or have access at all times during the mediation to a person with such authority.

      4.  If the plaintiff or the representative fails to attend the mediation, fails to participate in the mediation in good faith or does not have the authority or access to a person with the authority required by subsection 3, the mediator shall prepare and submit to the Mediation Administrator and the court a petition and recommendation concerning the imposition of sanctions against the plaintiff or the representative. The court may issue an order imposing such sanctions against the plaintiff or the representative as the court determines appropriate, including, without limitation, requiring a loan modification in the manner determined proper by the court.

      5.  If the mortgagor [elected] is enrolled to [enter into] participate in mediation [and] pursuant to this section but fails to attend the mediation, no mediation is required and the judicial foreclosure action must proceed as if the mortgagor had [not] elected to [enter into] waive mediation.

      6.  If the mediator determines that the parties, while acting in good faith, are not able to agree to a loan modification, the mediator shall prepare and submit to the court and the Mediation Administrator a recommendation that the mediation be terminated. The court may terminate the mediation and proceed with the judicial foreclosure action.

      7.  The rules adopted by the Supreme Court pursuant to subsection 11 of NRS 107.086 apply to a mediation conducted pursuant to this section, and the Supreme Court may adopt any additional rules necessary to carry out the provisions of this section.

      8.  Except as otherwise provided in subsection 10, the provisions of this section do not apply if:

      (a) The mortgagor has surrendered the property, as evidenced by a letter confirming the surrender or delivery of the keys to the property to the trustee, the beneficiary of the deed of trust or the mortgagee, or an authorized agent thereof; or

      (b) A petition in bankruptcy has been filed with respect to the defendant under 11 U.S.C. Chapter 7, 11, 12 or 13 and the bankruptcy court has not entered an order closing or dismissing the case or granting relief from a stay of foreclosure.

      9.  A noncommercial lender is not excluded from the application of this section.

      10.  The Mediation Administrator and each mediator who acts pursuant to this section in good faith and without gross negligence are immune from civil liability for those acts.

      11.  As used in this section:

      (a) “Mediation Administrator” has the meaning ascribed to it in NRS 107.086.

 


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      (b) “Mortgagor” includes the grantor of a deed of trust or the person who holds the title of record to the real property.

      (c) “Noncommercial lender” has the meaning ascribed to it in NRS 107.086.

      [(c)](d) “Owner-occupied housing” has the meaning ascribed to it in NRS 107.086.

      Sec. 7. NRS 40.440 is hereby amended to read as follows:

      40.440  [If there is surplus money remaining after payment of the amount due on the mortgage or other lien, with costs,] Following a foreclosure sale, the court may cause the [same] proceeds of the foreclosure sale to be paid to the [person] persons entitled to it pursuant to NRS 40.462, and in the meantime may direct it to be deposited in court.

      Sec. 8. NRS 40.455 is hereby amended to read as follows:

      40.455  1.  Except as otherwise provided in subsection 3, upon application of the judgment creditor or the beneficiary of the deed of trust within 6 months after the date of the foreclosure sale [or the trustee’s sale held pursuant to NRS 107.080, respectively,] and after the required hearing, the court shall award a deficiency judgment to the judgment creditor or the beneficiary of the deed of trust if it appears from the sheriff’s return or the recital of consideration in the trustee’s deed that there is a deficiency of the proceeds of the sale and a balance remaining due to the judgment creditor or the beneficiary of the deed of trust, respectively.

      2.  If the indebtedness is secured by more than one parcel of real property, more than one interest in the real property or more than one mortgage or deed of trust, the 6-month period begins to run after the date of the foreclosure sale [or trustee’s sale] of the last parcel or other interest in the real property securing the indebtedness, but in no event may the application be filed more than 2 years after the initial foreclosure sale . [or trustee’s sale.]

      3.  If the judgment creditor or the beneficiary of the deed of trust is a financial institution, the court may not award a deficiency judgment to the judgment creditor or the beneficiary of the deed of trust, even if there is a deficiency of the proceeds of the sale and a balance remaining due the judgment creditor or beneficiary of the deed of trust, if:

      (a) The real property is a single-family dwelling and the debtor or grantor was the owner of the real property at the time of the foreclosure sale ; [or trustee’s sale;]

      (b) The debtor or grantor used the amount for which the real property was secured by the mortgage or deed of trust to purchase the real property;

      (c) The debtor or grantor continuously occupied the real property as the debtor’s or grantor’s principal residence after securing the mortgage or deed of trust; and

      (d) The debtor or grantor did not refinance the mortgage or deed of trust after securing it.

      4.  For purposes of an action against a guarantor, surety or other obligor of an indebtedness or obligation secured by a mortgage or lien upon real property pursuant to NRS 40.495, the term “application” includes, without limitation, a complaint or other pleading to collect the indebtedness or obligation which is filed before the date and time of the foreclosure sale unless a judgment has been entered in such action as provided in paragraph (b) of subsection 4 of NRS 40.495.

 


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      5.  As used in this section, “financial institution” has the meaning ascribed to it in NRS 363A.050.

      Sec. 9. NRS 40.457 is hereby amended to read as follows:

      40.457  1.  Before awarding a deficiency judgment under NRS 40.455, the court shall hold a hearing and shall take evidence presented by either party concerning the fair market value of the property sold as of the date of foreclosure sale . [or trustee’s sale.] Notice of such hearing shall be served upon all defendants who have appeared in the action and against whom a deficiency judgment is sought, or upon their attorneys of record, at least 15 days before the date set for hearing.

      2.  Upon application of any party made at least 10 days before the date set for the hearing the court shall, or upon its own motion the court may, appoint an appraiser to appraise the property sold as of the date of foreclosure sale . [or trustee’s sale.] Such appraiser shall file with the clerk the appraisal, which is admissible in evidence. The appraiser shall take an oath that the appraiser has truly, honestly and impartially appraised the property to the best of the appraiser’s knowledge and ability. Any appraiser so appointed may be called and examined as a witness by any party or by the court. The court shall fix a reasonable compensation for the appraiser, but the appraiser’s fee shall not exceed similar fees for similar services in the county where the encumbered land is situated.

      Sec. 10. NRS 40.458 is hereby amended to read as follows:

      40.458  1.  If the judgment creditor or the beneficiary of the deed of trust who applies for a deficiency judgment is a banking or other financial institution, the court may not award a deficiency judgment to the judgment creditor or the beneficiary of the deed of trust if:

      (a) The real property is a single-family dwelling and the debtor or the grantor of the deed of trust was the owner of the real property at the time of the sale in lieu of a foreclosure sale;

      (b) The debtor or grantor used the amount for which the real property was secured by the mortgage or deed of trust to purchase the real property;

      (c) The debtor or grantor continuously occupied the real property as the debtor’s or grantor’s principal residence after securing the mortgage or deed of trust;

      (d) The debtor or grantor and the banking or other financial institution entered into an agreement to sell the real property secured by the mortgage or deed of trust to a third party for an amount less than the indebtedness secured thereby; and

      (e) The agreement entered into pursuant to paragraph (d):

             (1) Does not state the amount of money still owed to the banking or other financial institution by the debtor or grantor or does not authorize the banking or other financial institution to recover that amount from the debtor or grantor; and

             (2) Contains a conspicuous statement that has been acknowledged by the signature of the banking or other financial institution and the debtor or grantor which provides that the banking or other financial institution has waived its right to recover the amount owed by the debtor or grantor and which sets forth the amount of recovery that is being waived.

      2.  As used in this section [:

 


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      (a) “Banking] , “banking or other financial institution” means any bank, savings and loan association, savings bank, thrift company, credit union or other financial institution that is licensed, registered or otherwise authorized to do business in this State.

      [(b) “Sale in lieu of a foreclosure sale” means a sale of real property pursuant to an agreement between a person to whom an obligation secured by a mortgage or other lien on real property is owed and the debtor of that obligation in which the sales price of the real property is insufficient to pay the full outstanding balance of the obligation and the costs of the sale. The term includes, without limitation, a deed in lieu of foreclosure.]

      Sec. 11. NRS 40.462 is hereby amended to read as follows:

      40.462  1.  Except as otherwise provided by specific statute, this section governs the distribution of the proceeds of a foreclosure sale. The provisions of NRS 40.455, 40.457 and 40.459 do not affect the right to receive those proceeds, which vests at the time of the foreclosure sale. The purchase of any interest in the property at the foreclosure sale, and the subsequent disposition of the property, does not affect the right of the purchaser to the distribution of proceeds pursuant to paragraph (c) of subsection 2, or to obtain a deficiency judgment pursuant to NRS 40.455, 40.457 and 40.459.

      2.  The proceeds of a foreclosure sale must be distributed in the following order of priority:

      (a) Payment of the reasonable expenses of taking possession, maintaining, protecting and leasing the property, the costs and fees of the foreclosure sale, including reasonable trustee’s fees, applicable taxes and the cost of title insurance and, to the extent provided in the legally enforceable terms of the mortgage or lien, any advances, reasonable attorney’s fees and other legal expenses incurred by the foreclosing creditor and the person conducting the foreclosure sale.

      (b) Satisfaction of the obligation being enforced by the foreclosure sale.

      (c) Satisfaction of obligations secured by any junior mortgages or liens on the property, in their order of priority.

      (d) Payment of the balance of the proceeds, if any, to the debtor or the debtor’s successor in interest.

Ê If there are conflicting claims to any portion of the proceeds, the person conducting the foreclosure sale is not required to distribute that portion of the proceeds until the validity of the conflicting claims is determined through interpleader or otherwise to the person’s satisfaction.

      3.  A person who claims a right to receive the proceeds of a foreclosure sale pursuant to paragraph (c) of subsection 2 must, upon the written demand of the person conducting the foreclosure sale, provide:

      (a) Proof of the obligation upon which the claimant claims a right to the proceeds; and

      (b) Proof of the claimant’s interest in the mortgage or lien, unless that proof appears in the official records of a county in which the property is located.

Ê Such a demand is effective upon personal delivery or upon mailing by registered or certified mail, return receipt requested, to the last known address of the claimant. Failure of a claimant to provide the required proof within 15 days after the effective date of the demand waives the claimant’s right to receive those proceeds.

 


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      [4.  As used in this section, “foreclosure sale” means the sale of real property to enforce an obligation secured by a mortgage or lien on the property, including the exercise of a trustee’s power of sale pursuant to NRS 107.080.]

      Sec. 12. NRS 40.464 is hereby amended to read as follows:

      40.464  1.  Any vacant residential property purchased or acquired by a person at a foreclosure sale [pursuant to NRS 40.430] must be maintained by that person in accordance with subsection 2.

      2.  In addition to complying with any other ordinance or rule as required by the applicable governmental entity, the purchaser shall care for the exterior of the property, including, without limitation:

      (a) Limiting the excessive growth of foliage which would otherwise diminish the value of that property or of the surrounding properties;

      (b) Preventing trespassers from remaining on the property;

      (c) Preventing mosquito larvae from growing in standing water; and

      (d) Preventing any other condition that creates a public nuisance.

      3.  If a person violates subsection 2, the applicable governmental entity shall mail to the last known address of the person, by certified mail, a notice:

      (a) Describing the violation;

      (b) Informing the person that a civil penalty may be imposed pursuant to this section unless the person acts to correct the violation within 14 days after the date of receipt of the notice and completes the correction within 30 days after the date of receipt of the notice; and

      (c) Informing the person that the person may contest the allegation pursuant to subsection 4.

      4.  If a person, within 5 days after a notice is mailed to the person pursuant to subsection 3, requests a hearing to contest the allegation of a violation of subsection 2, the applicable governmental entity shall apply for a hearing before a court of competent jurisdiction.

      5.  Except as otherwise provided in subsection 8, in addition to any other penalty, the applicable governmental entity may impose a civil penalty of not more than $1,000 per day for a violation of subsection 2:

      (a) Commencing on the day following the expiration of the period of time described in subsection 3; or

      (b) If the person requested a hearing pursuant to subsection 4, commencing on the day following a determination by the court in favor of the applicable governmental entity.

      6.  The applicable governmental entity may waive or extend the period of time described in subsection 3 if:

      (a) The person to whom a notice is sent pursuant to subsection 3 makes a good faith effort to correct the violation; and

      (b) The violation cannot be corrected in the period of time described in subsection 3.

      7.  Any penalty collected by the applicable governmental entity pursuant to this section must be directed to local nuisance abatement programs.

      8.  The applicable governmental entity may not assess any penalty pursuant to this section in addition to any penalty prescribed by a local ordinance. This section shall not be deemed to preempt any local ordinance.

      9.  If the applicable governmental entity assesses any penalty pursuant to this section, any lien related thereto must be recorded in the office of the county recorder.

      10.  As used in this section, “applicable governmental entity” means:

 


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      (a) If the property is within the boundaries of a city, the governing body of the city; and

      (b) If the property is not within the boundaries of a city, the board of county commissioners of the county in which the property is located.

      Sec. 13. NRS 40.495 is hereby amended to read as follows:

      40.495  1.  The provisions of NRS 40.475 and 40.485 may be waived by the guarantor, surety or other obligor only after default.

      2.  Except as otherwise provided in subsection 5, a guarantor, surety or other obligor, other than the mortgagor or grantor of a deed of trust, may waive the provisions of NRS 40.430. If a guarantor, surety or other obligor waives the provisions of NRS 40.430, an action for the enforcement of that person’s obligation to pay, satisfy or purchase all or part of an indebtedness or obligation secured by a mortgage or lien upon real property may be maintained separately and independently from:

      (a) An action on the debt;

      (b) The exercise of any power of sale;

      (c) Any action to foreclose or otherwise enforce a mortgage or lien and the indebtedness or obligations secured thereby; and

      (d) Any other proceeding against a mortgagor or grantor of a deed of trust.

      3.  If the obligee maintains an action to foreclose or otherwise enforce a mortgage or lien and the indebtedness or obligations secured thereby, the guarantor, surety or other obligor may assert any legal or equitable defenses provided pursuant to the provisions of NRS 40.451 to 40.4639, inclusive.

      4.  If, before a foreclosure sale of real property, the obligee commences an action against a guarantor, surety or other obligor, other than the mortgagor or grantor of a deed of trust, to enforce an obligation to pay, satisfy or purchase all or part of an indebtedness or obligation secured by a mortgage or lien upon the real property:

      (a) The court must hold a hearing and take evidence presented by either party concerning the fair market value of the property as of the date of the commencement of the action. Notice of such hearing must be served upon all defendants who have appeared in the action and against whom a judgment is sought, or upon their attorneys of record, at least 15 days before the date set for the hearing.

      (b) After the hearing, if the court awards a money judgment against the guarantor, surety or other obligor who is personally liable for the debt, the court must not render judgment for more than:

             (1) The amount by which the amount of the indebtedness exceeds the fair market value of the property as of the date of the commencement of the action; or

             (2) If a foreclosure sale is concluded before a judgment is entered, the amount that is the difference between the amount for which the property was actually sold and the amount of the indebtedness which was secured,

Ê whichever is the lesser amount.

      5.  The provisions of NRS 40.430 may not be waived by a guarantor, surety or other obligor if the mortgage or lien:

      (a) Secures an indebtedness for which the principal balance of the obligation was never greater than $500,000;

      (b) Secures an indebtedness to a seller of real property for which the obligation was originally extended to the seller for any portion of the purchase price;

 


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      (c) Is secured by real property which is used primarily for the production of farm products as of the date the mortgage or lien upon the real property is created; or

      (d) Is secured by real property upon which:

             (1) The owner maintains the owner’s principal residence;

             (2) There is not more than one residential structure; and

             (3) Not more than four families reside.

      [6.  As used in this section, “foreclosure sale” has the meaning ascribed to it in NRS 40.462.]

      Sec. 14. NRS 107.140 is hereby amended to read as follows:

      107.140  1.  No provision of the laws of this State may be construed to require a sale in lieu of a foreclosure sale to be an arm’s length transaction or to prohibit a sale in lieu of a foreclosure sale that is not an arm’s length transaction.

      2.  As used in this section, “sale in lieu of a foreclosure sale” has the meaning ascribed to it in [NRS 40.4634.] section 5 of this act.

      Sec. 15. NRS 107.420 is hereby amended to read as follows:

      107.420  “Foreclosure prevention alternative” means a modification of a loan secured by the most senior residential mortgage loan on the property or any other loss mitigation option. The term includes, without limitation, a sale in lieu of a foreclosure sale, as defined in [NRS 40.4634.] section 5 of this act.

      Sec. 16. NRS 40.433, 40.4631, 40.4632, 40.4633, 40.4634 and 107.110 are hereby repealed.

________

CHAPTER 519, AB 173

Assembly Bill No. 173–Assemblymen Hickey, O’Neill and Kirner

 

CHAPTER 519

 

[Approved: June 10, 2015]

 

AN ACT relating to private investigations; exempting the Private Investigator’s Licensing Board from certain administrative procedures governing professional licensing boards; exempting certain professionals who provide information security from regulation as a private investigator; deleting provisions requiring a licensee or applicant for a license to maintain a principal place of business in this State; authorizing the Board to revoke the registration of a registered employee under certain circumstances; revising certain provisions relating to licensure and registration by the Board; revising provisions relating to disciplinary actions by the Board; providing penalties; and providing other matters properly relating thereto.

Legislative Counsel’s Digest:

      Existing law requires the Private Investigator’s Licensing Board to comply with certain administrative procedures governing certain professional licensing boards. (Chapter 622A of NRS) Sections 1, 4 and 5 of this bill exempt the Board from complying with such procedures.

 


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      Existing law provides that a person engaging in the business of a private investigator must be licensed and is subject to regulation by the Board. (NRS 648.060) Existing law defines a private investigator to include a person who conducts an investigation through the review or analysis of computerized data not available to the public. (NRS 648.012) Section 1.3 of this bill defines the term “information security.” Section 2.5 of this bill revises the definition of “private investigator” to exclude from the definition certain professionals who provide information security. Section 3 of this bill exempts certain professionals who provide information security from the provisions of NRS governing private investigators.

      Existing law prohibits a person from engaging in any business regulated by the Board or advertising such business unless the person is licensed by the Board. Existing law further prohibits the employment by a licensee of a person unless the person is a registered employee. Existing law requires the Board to assess certain administrative fines for violations of these provisions and specifies the amounts of such administrative fines. (NRS 648.060, 648.165) Section 14 of this bill authorizes rather than requires the Board to assess such administrative fines and provides the Board with discretion as to the amount of such administrative fines.

      Sections 7, 8, 10 and 11 of this bill delete provisions requiring a licensee or an applicant for a license to maintain a principal place of business in Nevada.

      Section 9 of this bill provides that each registered employee employed in this State by a licensee must be supervised by the licensee or his or her designated agent who is physically present in this State.

      Under existing law, the Board is required to issue a registration to a person who, in addition to certain other requirements, has not been convicted of, or entered a plea of nolo contendere to, a felony or a crime involving moral turpitude or the illegal use or possession of a dangerous weapon. (NRS 648.1493) Existing law provides that a licensee may employ only persons who have not been convicted of a felony or a crime involving moral turpitude or the illegal use or possession of a dangerous weapon. (NRS 648.060) Sections 6 and 12 of this bill remove this prohibition, effectively providing the Board with the discretion to issue a registration to a person who is otherwise qualified to obtain a registration but has been convicted of such crimes.

      Section 1.7 of this bill authorizes the Board to revoke the registration of a registered employee under certain circumstances. Section 13 of this bill expands the authority of the Board to investigate the actions of a person holding or claiming to hold a license to include investigations of the actions of a person holding or claiming to hold a registration. Section 13.5 of this bill provides that it is grounds for the suspension or revocation of a registration or application for registration that a registered employee or applicant for a registration fails to comply with a notice of violation issued by the Board. Sections 14.5 and 15 of this bill similarly expand provisions of existing law relating to disciplinary action by the Board to include disciplinary action with regard to registered employees.

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

      Section 1. NRS 622A.120 is hereby amended to read as follows:

      622A.120  1.  The following regulatory bodies are exempted from the provisions of this chapter:

      (a) State Contractors’ Board.

      (b) State Board of Professional Engineers and Land Surveyors.

      (c) Nevada State Board of Accountancy.

      (d) Board of Medical Examiners.

      (e) Board of Dental Examiners of Nevada.

 


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      (f) State Board of Nursing.

      (g) Chiropractic Physicians’ Board of Nevada.

      (h) Nevada State Board of Optometry.

      (i) State Board of Pharmacy.

      (j) Board of Examiners for Marriage and Family Therapists and Clinical Professional Counselors.

      (k) Real Estate Commission, Real Estate Administrator and Real Estate Division of the Department of Business and Industry.

      (l) Commission of Appraisers of Real Estate.

      (m) Commissioner of Mortgage Lending and Division of Mortgage Lending of the Department of Business and Industry.

      (n) Commissioner of Financial Institutions and Division of Financial Institutions of the Department of Business and Industry.

      (o) Private Investigator’s Licensing Board.

      (p) State Board of Health and Division of Public and Behavioral Health of the Department of Health and Human Services.

      2.  Any regulatory body which is exempted from the provisions of this chapter pursuant to subsection 1 may elect by regulation to follow the provisions of this chapter or any portion thereof.

      Sec. 1.1. Chapter 648 of NRS is hereby amended by adding thereto the provisions set forth as sections 1.3, 1.5 and 1.7 of this act.

      Sec. 1.3. “Information security” has the meaning ascribed to it in 44 U.S.C. § 3552. The term includes restoring the integrity, confidentiality and availability of information and information systems after a data breach, suspected data breach or other data security incident.

      Sec. 1.5. “Registered employee” means a person to whom the Board has issued a registration pursuant to NRS 648.1493.

      Sec. 1.7. The Board may revoke the registration of a registered employee if the Board finds, after a hearing conducted pursuant to NRS 648.166 and 648.170, that the registered employee:

      1.  Failed to disclose any fact or misstated or otherwise misled the Board with respect to any fact contained in any application for the issuance or renewal of a registration submitted to the Board by the registered employee;

      2.  On or after the date on which the Board issues a registration to the registered employee, the registered employee commits or attempts or conspires to commit any act prohibited by this chapter or any regulation adopted or order issued pursuant thereto; or

      3.  On or after the date on which the Board issues a registration to the registered employee, the registered employee is convicted of, or enters a plea of nolo contendere to, a felony or a crime involving moral turpitude or the illegal use or possession of a dangerous weapon.

      Sec. 2. NRS 648.005 is hereby amended to read as follows:

      648.005  As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 648.006 to 648.016, inclusive, and sections 1.3 and 1.5 of this act have the meanings ascribed to them in those sections.

      Sec. 2.5. NRS 648.012 is hereby amended to read as follows:

      648.012  1.  “Private investigator” means any person who for any consideration engages in business or accepts employment to furnish, or agrees to make or makes any investigation for the purpose of obtaining [, including, without limitation, through the review, analysis and investigation of computerized data not available to the public,] information with reference to:

 


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including, without limitation, through the review, analysis and investigation of computerized data not available to the public,] information with reference to:

      [1.](a) The identity, habits, conduct, business, occupation, honesty, integrity, credibility, knowledge, trustworthiness, efficiency, loyalty, activity, movement, whereabouts, affiliations, associations, transactions, acts, reputation or character of any person;

      [2.](b) The location, disposition or recovery of lost or stolen property;

      [3.](c) The cause or responsibility for fires, libels, losses, accidents or damage or injury to persons or to property;

      [4.](d) A crime or tort that has been committed, attempted, threatened or suspected, except an expert witness or a consultant who is retained for litigation or a trial, or in anticipation of litigation or a trial, and who performs duties and tasks within his or her field of expertise that are necessary to form his or her opinion;

      [5.](e) Securing evidence to be used before any court, board, officer or investigating committee; or

      [6.](f) The prevention, detection and removal of surreptitiously installed devices for eavesdropping or observation.

      2.  The term does not include:

      (a) Any person who is accessing exclusively public records, public databases or any other public information; or

      (b) Any person who for any consideration engages in business or accepts employment to provide information security.

      Sec. 3. NRS 648.018 is hereby amended to read as follows:

      648.018  Except as to polygraphic examiners and interns, this chapter does not apply:

      1.  To any detective or officer belonging to the law enforcement agencies of the State of Nevada or the United States, or of any county or city of the State of Nevada, while the detective or officer is engaged in the performance of his or her official duties.

      2.  To special police officers appointed by the police department of any city, county, or city and county within the State of Nevada while the officer is engaged in the performance of his or her official duties.

      3.  To insurance adjusters and their associate adjusters licensed pursuant to the Nevada Insurance Adjusters Law who are not otherwise engaged in the business of private investigators.

      4.  To any private investigator, private patrol officer, process server, dog handler or security consultant employed by an employer regularly in connection with the affairs of that employer if a bona fide employer-employee relationship exists, except as otherwise provided in NRS 648.060, 648.140 and 648.203.

      5.  To a repossessor employed exclusively by one employer regularly in connection with the affairs of that employer if a bona fide employer-employee relationship exists, except as otherwise provided in NRS 648.060, 648.140 and 648.203.

      6.  To a person engaged exclusively in the business of obtaining and furnishing information as to the financial rating of persons.

      7.  To a charitable philanthropic society or association incorporated under the laws of this State which is organized and maintained for the public good and not for private profit.

      8.  To an attorney at law in performing his or her duties as such.

 


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      9.  To a collection agency unless engaged in business as a repossessor, licensed by the Commissioner of Financial Institutions, or an employee thereof while acting within the scope of his or her employment while making an investigation incidental to the business of the agency, including an investigation of the location of a debtor or his or her assets and of property which the client has an interest in or lien upon.

      10.  To admitted insurers and agents and insurance brokers licensed by the State, performing duties in connection with insurance transacted by them.

      11.  To any bank organized pursuant to the laws of this State or to any national bank engaged in banking in this State.

      12.  To any person employed to administer a program of supervision for persons who are serving terms of residential confinement.

      13.  To any commercial registered agent, as defined in NRS 77.040, who obtains copies of, examines or extracts information from public records maintained by any foreign, federal, state or local government, or any agency or political subdivision of any foreign, federal, state or local government.

      14.  To any holder of a certificate of certified public accountant issued by the Nevada State Board of Accountancy pursuant to chapter 628 of NRS while performing his or her duties pursuant to the certificate.

      15.  To a person performing the repair or maintenance of a computer who performs a review or analysis of data contained on a computer solely for the purposes of diagnosing a computer hardware or software problem and who is not otherwise engaged in the business of a private investigator.

      16.  To any person who for any consideration engages in business or accepts employment to provide information security.

      Sec. 4. NRS 648.033 is hereby amended to read as follows:

      648.033  1.  The Board shall maintain a public record of:

      (a) The business it transacts at its regular and special meetings; and

      (b) The applications received by it together with the record of the disposition of each application.

      2.  Except as otherwise provided in NRS 239.0115, information obtained by the Board from other than public sources concerning the:

      (a) Financial condition; or

      (b) Criminal record,

Ê of an applicant or a licensee is confidential and may be revealed only to the extent necessary for the proper administration of the provisions of this chapter.

      3.  The Board may release information described in subsection 2 to an agency of the Federal Government, of a state or of a political subdivision of this State.

      4.  The Board shall adopt by regulation a procedure for notifying the applicant or licensee of the release of confidential information pursuant to subsections 2 and 3. The Board shall release information described in subsection 2 concerning an applicant or licensee to the applicant or licensee upon request.

      5.  Except as otherwise provided in this section and NRS 239.0115, a complaint filed with the Board, all documents and other information filed with the complaint and all documents and other information compiled as a result of an investigation conducted to determine whether to initiate disciplinary action against a person are confidential, unless the person submits a written statement to the Board requesting that such documents and information be made public records.

 


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      6.  The charging documents filed with the Board to initiate disciplinary action [pursuant to chapter 622A of NRS] and all other documents and information considered by the Board when determining whether to impose discipline are public records.

      7.  The provisions of this section do not prohibit the Board from communicating or cooperating with or providing any documents or other information to any other licensing board or any other agency that is investigating a person, including, without limitation, a law enforcement agency.

      Sec. 5. NRS 648.040 is hereby amended to read as follows:

      648.040  1.  There is hereby created in the State General Fund the Fund for the Private Investigator’s Licensing Board, to be administered by the Board.

      2.  Except as otherwise provided in subsection 7, all money received pursuant to the provisions of this chapter must be deposited in the State Treasury for credit to the Fund for the Private Investigator’s Licensing Board and must be used by the Board for the administration of this chapter and to pay the expenses and salary of members, agents and employees of the Board.

      3.  All claims against the Fund must be paid as other claims against the State are paid. Any amount remaining in the Fund at the end of a fiscal year must be carried forward into the next fiscal year.

      4.  The Board through majority vote controls exclusively the expenditures from the Fund. The Board may not make expenditures or incur liabilities in a total amount greater than the amount of money actually available in the Fund.

      5.  Except as otherwise provided in subsection 7, the money in this Fund may be used to:

      (a) Pay the expenses of the Board in connection with the investigation of the background of an applicant;

      (b) Finance a substantive investigation of a licensee or of unlicensed activity; and

      (c) Pay the operational and administrative expenses of the Board and its Secretary,

Ê and for such other expenses as the Board deems appropriate to regulate the persons subject to its supervision.

      6.  [In a manner consistent with the provisions of chapter 622A of NRS, the] The Board may delegate to a hearing officer or panel its authority to take any disciplinary action pursuant to this chapter, impose and collect fines therefor and deposit the money therefrom in the State Treasury for credit to the Fund for the Private Investigator’s Licensing Board.

      7.  If a hearing officer or panel is not authorized to take disciplinary action pursuant to subsection 6, the Board shall deposit the money collected from the imposition of fines with the State Treasurer for credit to the State General Fund. In such a case, the Board may present a claim to the State Board of Examiners for recommendation to the Interim Finance Committee if money is needed to pay attorney’s fees or the costs of an investigation, or both.

      Sec. 6. NRS 648.060 is hereby amended to read as follows:

      648.060  1.  Except as otherwise provided in NRS 253.220, no person may:

 


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      (a) Engage in the business of private investigator, private patrol officer, process server, repossessor, dog handler, security consultant, or polygraphic examiner or intern; or

      (b) Advertise his or her business as such, irrespective of the name or title actually used,

Ê unless the person is licensed pursuant to this chapter.

      2.  No person may be employed by a licensee unless the person is registered pursuant to this chapter. The provisions of this subsection do not apply to a person licensed pursuant to this chapter.

      [3.  A person licensed pursuant to this chapter may employ only another licensee, or a nonlicensed person who:

      (a) Is at least 18 years of age.

      (b) Is a citizen of the United States or lawfully entitled to remain and work in the United States.

      (c) Is of good moral character and temperate habits.

      (d) Has not been convicted of a felony or a crime involving moral turpitude or the illegal use or possession of a dangerous weapon.

      (e) Is registered pursuant to this chapter.]

      Sec. 7. NRS 648.080 is hereby amended to read as follows:

      648.080  Every application for a license must contain:

      1.  A detailed statement of the applicant’s personal history on the form specified by the Board. If the applicant is a corporation, the application must include such a statement concerning each officer and director.

      2.  A statement of the applicant’s financial condition on the form specified by the Board. If the applicant is a corporation, the application must include such a statement concerning each officer and director.

      3.  The complete address of the principal place of business of the applicant [in this State] and of each branch office or other place of business of the applicant . [in this State.]

      4.  The business or businesses in which the applicant intends to engage and the category or categories of license he or she desires.

      5.  A complete set of fingerprints which the Board may forward to the Central Repository for Nevada Records of Criminal History for submission to the Federal Bureau of Investigation for its report.

      6.  A recent photograph of the applicant or, if the applicant is a corporation, of each officer and director.

      7.  Evidence supporting the qualifications of the applicant in meeting the requirements for the license for which he or she is applying.

      8.  If the applicant is not a natural person, the full name and residence address of each of its partners, officers, directors and manager, and a certificate of filing of a fictitious name.

      9.  Such other facts as may be required by the Board to show the good character, competency and integrity of each signatory.

      Sec. 8. NRS 648.100 is hereby amended to read as follows:

      648.100  1.  The Board shall require an applicant to pass a written examination for an initial license and may require an applicant to pass an oral examination. Examinations must be given at least four times a year.

      2.  The Board shall conduct [such] an investigation of an applicant, including the directors and officers of a corporate applicant, as it considers necessary. An applicant shall deposit with the Board at the time of making an initial application for any license a fee of $750 for the first category of license and $250 for each additional category of license for which application is made, which must be applied to the cost of conducting the investigation.

 


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application is made, which must be applied to the cost of conducting the investigation. [An individual applicant who is a resident of Nevada is liable for the entire cost of the investigation up to a maximum cost of $1,500 for the first category of license and $500 for each additional category of license for which application is made. A corporate applicant or an individual applicant who is not a resident of Nevada is liable for the entire cost of the investigation.] Each applicant must pay the entire fee for which he or she is liable before taking an examination.

      3.  The Board may refuse to grant a license if it determines that the applicant has:

      (a) Committed any act which if committed by a licensee would be a ground for the suspension or revocation of a license under this chapter.

      (b) Committed any act constituting dishonesty or fraud.

      (c) Demonstrated untruthfulness or a lack of integrity.

      (d) Been refused a license under this chapter or had a license revoked.

      (e) Been an officer, director, partner or manager of any firm, partnership, association or corporation which has been refused a license under this chapter or whose license has been revoked.

      (f) While unlicensed, performed any act for which a license is required by this chapter.

      (g) Knowingly made any false statement in the application.

      (h) Refused to provide any information required by the Board.

      4.  The Board shall provide the applicant with a copy of the report of the investigation within a reasonable time after it receives the completed report.

      Sec. 9. NRS 648.140 is hereby amended to read as follows:

      648.140  1.  Any license obtained pursuant to the provisions of this chapter gives the licensee or any bona fide employee of the licensee authority to engage in the type of business for which he or she is licensed in any county or city in the State of Nevada. A county or city shall not enact ordinances regulating persons licensed pursuant to this chapter, except general business regulations designed to raise revenue or assure compliance with building codes and ordinances or regulations concerning zoning and safety from fire.

      2.  Except for polygraphic examiners and interns, a licensee may employ, in connection with his or her business, as many [persons registered pursuant to this chapter] registered employees as may be necessary, but at all times every licensee:

      (a) Shall ensure that each registered [person] employee employed in this State by the licensee is supervised by [a] the licensee or his or her qualifying agent who is physically present in this State; and

      (b) Is accountable for the good conduct of every person employed by the licensee in connection with his or her business.

      3.  Each licensee shall:

      (a) Maintain at a location within this State records relating to the employment, compensation, licensure and registration of employees;

      (b) Furnish the Board with the information requested by it concerning all registered employees ; [registered pursuant to this chapter, except clerical personnel;] and

      (c) Notify the Board within 3 days after such employees begin their employment.

 


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      Sec. 10. NRS 648.142 is hereby amended to read as follows:

      648.142  1.  The license, when issued, shall be in such form as may be determined by the Board and shall include:

      (a) The name of the licensee.

      (b) The name under which the licensee is to operate.

      (c) The number and date of the license.

      (d) The expiration date of the license.

      (e) If the licensee is a corporation, the name of the person or persons affiliated with the corporation on the basis of whose qualifications such license is issued.

      (f) The classification or classifications of work which the license authorizes.

      2.  The license shall at all times be posted in a conspicuous place in the licensee’s principal place of business . [in this State.]

      3.  Upon the issuance of a license, a pocket card of such size, design and content as may be determined by the Board shall be issued without charge to each licensee, if an individual, or if the licensee is a person other than an individual, to its manager and to each of its officers, directors and partners, which card shall be evidence that the licensee is duly licensed pursuant to this chapter. When any person to whom a card is issued terminates his or her position, office or association with the licensee, the card shall be surrendered to the licensee and within 5 days thereafter shall be mailed or delivered by the licensee to the Board for cancellation.

      4.  A licensee shall, within 30 days after such change, notify the Board of any and all changes of his or her address, of the name under which the licensee does business, and of any change in its officers, directors or partners.

      5.  A license issued under this chapter is not assignable.

      Sec. 11. NRS 648.148 is hereby amended to read as follows:

      648.148  1.  Each licensee shall:

      (a) Maintain a principal place of business ; [in this State;] and

      (b) File with the Board the complete address of his or her principal place of business , [in this State,] including the name and number of the street, or, if the street where the business is located is not numbered, the number of the post office box. The Board may require the filing of other information for the purpose of identifying such principal place of business.

      2.  Every advertisement by a licensee soliciting or advertising business shall contain the licensee’s name and the number of the licensee’s license as they appear in the records of the Board.

      Sec. 12. NRS 648.1493 is hereby amended to read as follows:

      648.1493  1.  To obtain a registration, a person must:

      (a) Be a natural person;

      (b) File a written application for registration with the Board;

      (c) Comply with the applicable requirements of this chapter; and

      (d) Pay an application fee set by the Board of not more than $135.

      2.  An application for registration must include:

      (a) A fully completed application for registration as an employee;

      (b) A passport size photo;

      (c) A completed set of fingerprint cards or a receipt for electronically submitted fingerprints of the applicant submitted as required by the Board; and

 


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      (d) Any other information or supporting materials required pursuant to the regulations adopted by the Board or by an order of the Board. Such information or supporting materials may include, without limitation, other forms of identification of the person.

      3.  Except as otherwise provided in this chapter, the Board shall issue a registration to an applicant if:

      (a) The application is verified by the Board and complies with the applicable requirements of this chapter; and

      (b) The applicant:

             (1) Is at least 18 years of age;

             (2) Is a citizen of the United States or lawfully entitled to remain and work in the United States;

             (3) Is of good moral character and temperate habits;

             [(2)](4) Has not been convicted of, or entered a plea of nolo contendere to, a felony or a crime involving moral turpitude or the illegal use or possession of a dangerous weapon;

             [(3)](5) Has not made a false statement of material fact on the application; and

             [(4)](6) Has not violated any provision of this chapter, a regulation adopted pursuant thereto or an order of the Board.

      4.  Upon the issuance of a registration, a pocket card of such size, design and content as may be determined by the Board will be issued without charge to each registered [person,] employee, and will be evidence that the [person] employee is duly registered pursuant to this chapter.

      5.  A registration issued pursuant to this section and the cards issued pursuant to subsection 4 expire 5 years after the date the registration is issued, unless it is renewed. To renew a registration, the holder of the registration must submit to the Board on or before the date the registration expires:

      (a) A fully completed application for renewal of registration as an employee;

      (b) A passport size photo;

      (c) A completed set of fingerprint cards or a receipt for electronically submitted fingerprints of the applicant submitted as required by the Board;

      (d) A renewal fee set by the Board of not more than $135; and

      (e) Any other information or supporting materials required pursuant to the regulations adopted by the Board or by an order of the Board. Such information or supporting materials may include, without limitation, other forms of identification of the person.

      6.  A denial of registration may be appealed to the Board. The Board shall adopt regulations providing for the consideration of such appeals.

      Sec. 13. NRS 648.160 is hereby amended to read as follows:

      648.160  1.  The Board may, upon its own motion:

      (a) Investigate the actions of any person holding or claiming to hold a license [.] or registration.

      (b) Authorize a representative of the Board to issue a notice of violation to any licensee or registered employee or any applicant for a license or registration who, based upon probable cause, has violated a requirement of this chapter, or any standard, rule or order adopted or issued pursuant to this chapter.

      2.  The Board shall, upon the filing with it of a verified written complaint by any person setting forth facts which, if proven, would constitute grounds for refusal, suspension or revocation of a license [,] or registration, investigate the actions of any person holding or claiming to hold a license [.]

 


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constitute grounds for refusal, suspension or revocation of a license [,] or registration, investigate the actions of any person holding or claiming to hold a license [.] or registration.

      3.  The Board has the power of subpoena in any proceeding before the Board pursuant to this chapter concerning the activity of an unlicensed person or unregistered employee or discipline of a licensee [.] or registered employee. If any person refuses to respond to a subpoena, the Board shall certify the facts to the district court of the county where the hearing is being conducted. The court shall thereupon issue an order directing the person to appear before the court and show cause why he or she should not be punished as for contempt. The order and a copy of the certified statement must be served on the person. Thereafter the court has jurisdiction of the matter. The same proceedings must be had, the same penalties may be imposed and the person charged may purge himself or herself of the contempt in the same way, as in the case of a person who has committed a contempt in the trial of a civil action.

      Sec. 13.5. NRS 648.164 is hereby amended to read as follows:

      648.164  1.  The failure of a licensee or registered employee to comply with a notice of violation after it is final is a ground for suspension or revocation of the person’s license [.] or registration.

      2.  The failure of an applicant for [licensure] a license or registration to comply with a notice of violation after it is final is a ground for denial of the person’s application for a license [.] or registration.

      Sec. 14. NRS 648.165 is hereby amended to read as follows:

      648.165  1.  The Board may issue to a person who has violated NRS 648.060 a citation.

      2.  Such a citation must be in writing and describe with particularity the nature of the violation. The citation must also inform the person of the provisions of subsection 5. A separate citation must be issued for each such violation.

      3.  If appropriate, the citation must contain an order to cease and desist conduct fixing a reasonable time for abatement of the violation. If the order to cease and desist conduct is directed to a business, the order must expressly state that it applies to any person acting in the name of the business regardless of whether any such person is alleged to have previously violated any of the provisions of this chapter.

      4.  The Board [shall] may assess an administrative fine of:

      (a) For the first such violation, not more than $2,500.

      (b) For the second such violation, not more than $5,000.

      (c) For the third or subsequent such violation, not more than $10,000.

      5.  To appeal the finding of such a violation, the person must request a hearing by written notice of appeal to the Board within 30 days after the date of issuance of the citation.

      Sec. 14.5. NRS 648.174 is hereby amended to read as follows:

      648.174  If a licensee or registered employee, or an applicant for a license or registration, has engaged in repeated acts which would be grounds for disciplinary action, but has corrected the conditions resulting from those acts, the correction of those conditions does not preclude the Board or its authorized representative from taking action against the person pursuant to NRS 648.160.

 


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      Sec. 15. NRS 648.177 is hereby amended to read as follows:

      648.177  Upon receiving written notification of a suspension, revocation or refusal to renew a license [,] or registration, the holder of the license or registration shall immediately surrender the license or registration to the Board.

      Sec. 16. NRS 648.200 is hereby amended to read as follows:

      648.200  It is unlawful for any licensee or any registered employee or other employee, security guard, officer or member of any licensee:

      1.  To divulge to anyone, except as he or she may be so required by law to do, any information acquired by him or her except at the direction of the employer or client for whom the information was obtained.

      2.  To make a false report to his or her employer or client.

________

CHAPTER 520, AB 203

Assembly Bill No. 203–Assemblyman Carrillo (by request)

 

CHAPTER 520

 

[Approved: June 10, 2015]

 

AN ACT relating to short-term lessors of vehicles; revising provisions governing the charging and collection of governmental services fees required upon the short-term leasing of passenger cars; and providing other matters properly relating thereto.

Legislative Counsel’s Digest:

      Under existing law, a person licensed as a short-term lessor of vehicles must charge and collect from each short-term lessee of a passenger car a governmental services fee of 10 percent of the total amount for which the passenger car was leased, excluding some deductions. (NRS 482.313) Section 1 of this bill adds to the list of permissible deductions the amount of any fee or charge that is imposed by a governmental entity. Section 1 also provides an exemption from the imposition of the governmental services fee for any passenger car leased by or on behalf of this State, its unincorporated agencies and instrumentalities and any county, city, district or other political subdivision of this State.

      Section 4 of this bill replaces the term “passenger car” with the term “vehicle” for the purposes of allowing an employee of a short-term lessor who holds a limited license as a producer of insurance to solicit and sell insurance requested by a short-term lessee. (NRS 683A.221)

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

      Section 1. NRS 482.313 is hereby amended to read as follows:

      482.313  1.  [Upon] Except as otherwise provided in subsection 8, upon the lease of a passenger car by a short-term lessor in this State, the short-term lessor shall charge and collect from the short-term lessee:

 


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      (a) A governmental services fee of 10 percent of the total amount for which the passenger car was leased, excluding any taxes or other fees imposed by a governmental entity and the items described in subsection 7; and

      (b) Any fee required pursuant to NRS 244A.810 or 244A.860.

Ê The amount of each fee charged pursuant to this subsection must be indicated in the lease agreement.

      2.  The fees due from a short-term lessor to the Department of Taxation pursuant to subsection 1 are due on the last day of each calendar quarter. On or before the last day of the month following each calendar quarter, the short-term lessor shall:

      (a) File with the Department of Taxation, on a form prescribed by the Department of Taxation, a report indicating the total amount of each of the fees collected by the short-term lessor pursuant to subsection 1 during the immediately preceding calendar quarter; and

      (b) Remit to the Department of Taxation the fees collected by the short-term lessor pursuant to subsection 1 during the immediately preceding calendar quarter.

      3.  Except as otherwise provided in a contract made pursuant to NRS 244A.820 or 244A.870, the Department of Taxation shall deposit all money received from short-term lessors pursuant to the provisions of subsection 1 with the State Treasurer for credit to the State General Fund.

      4.  To ensure compliance with this section, the Department of Taxation may audit the records of a short-term lessor.

      5.  The provisions of this section do not limit or affect the payment of any taxes or fees imposed pursuant to the provisions of this chapter.

      6.  The Department of Motor Vehicles shall, upon request, provide to the Department of Taxation any information in its records relating to a short-term lessor that the Department of Taxation considers necessary to collect the fees described in subsection 1.

      7.  For the purposes of charging and collecting the governmental services fee described in paragraph (a) of subsection 1, the following items must not be included in the total amount for which the passenger car was leased:

      (a) The amount of any fee charged and collected pursuant to paragraph (b) of subsection 1;

      (b) The amount of any charge for fuel used to operate the passenger car;

      (c) The amount of any fee or charge for the delivery, transportation or other handling of the passenger car;

      (d) The amount of any fee or charge for insurance, including, without limitation, personal accident insurance, extended coverage or insurance coverage for personal property; and

      (e) The amount of any charges assessed against a short-term lessee for damages for which the short-term lessee is held responsible.

      8.  The fee required pursuant to subsection 1 does not apply with respect to any passenger car leased by or on behalf of this State, its unincorporated agencies and instrumentalities or any county, city, district or other political subdivision of this State.

      9.  The Executive Director of the Department of Taxation shall:

      (a) Adopt such regulations as the Executive Director determines are necessary to carry out the provisions of this section; and

 


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      (b) Upon the request of the Director of the Department of Motor Vehicles, provide to the Director of the Department of Motor Vehicles a copy of any record or report described in this section.

      Secs. 2 and 3. (Deleted by amendment.)

      Sec. 4. NRS 683A.221 is hereby amended to read as follows:

      683A.221  If a short-term lessor of [passenger] vehicles licensed pursuant to NRS 482.363 holds a limited license as a producer of insurance issued pursuant to NRS 683A.271, an employee of the short-term lessor may engage in the solicitation and sale of insurance requested by a lessee pursuant to NRS 482.3158 without a license issued pursuant to this chapter if the solicitation and sale of such insurance is done on behalf of, and under the supervision of, the short-term lessor.

      Sec. 5.  This act becomes effective on July 1, 2015.

________

CHAPTER 521, SB 59

Senate Bill No. 59–Committee on Judiciary

 

CHAPTER 521

 

[Approved: June 10, 2015]

 

AN ACT relating to business; declaring certain records to be confidential; revising provisions governing the state business portal; revising provisions governing applications for certain authorizations to conduct a business in this State issued by state and local agencies and health districts; revising provisions governing the state business license; requiring the Secretary of State to issue unique business identification numbers under certain circumstances; revising provisions governing the issuance of certain licenses by incorporated cities and counties; removing the prohibition against a county clerk refusing to accept for filing certain business certificates in certain circumstances; revising provisions governing the disclosure of certain information by the Employment Security Division of the Department of Employment, Training and Rehabilitation; repealing certain provisions relating to the collection of information from businesses seeking certain authorizations to conduct business in this State; and providing other matters properly relating thereto.

Legislative Counsel’s Digest:

      Under existing law, the Secretary of State is required to establish the state business portal to facilitate interaction among businesses and governmental agencies in this State by allowing businesses to conduct necessary transactions with governmental agencies in this State through the state business portal. (NRS 75A.100) Section 4 of this bill requires the Secretary of State to: (1) establish common business registration information that is used by state and local agencies and health districts to conduct necessary transactions with businesses in this State; and (2) cause the state business portal to provide common business registration information to state and local agencies and health districts that conduct necessary transactions with businesses in this State. Section 4 further authorizes state and local agencies and health districts to: (1) integrate their electronic applications processes into the state business portal; (2) use the state business portal to accept and disseminate common business registration information that is needed by the state or local agency or health district to issue a license, certificate, registration, permit or similar type of authorization to conduct a business in this State or to engage in an occupation or profession in this State; (3) make available on the Internet applications for a license, certificate, registration, permit or similar type of authorization to conduct a business in this State or to engage in an occupation or profession in this State and to integrate such applications into the state business portal; and (4) meet certain other requirements related to participation in the state business portal.

 


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license, certificate, registration, permit or similar type of authorization to conduct a business in this State or to engage in an occupation or profession in this State; (3) make available on the Internet applications for a license, certificate, registration, permit or similar type of authorization to conduct a business in this State or to engage in an occupation or profession in this State and to integrate such applications into the state business portal; and (4) meet certain other requirements related to participation in the state business portal. However, section 4 also specifies that a state or local agency or health district is not required to disseminate or release information if such action would result in the state or local agency or health district violating any provision of state or federal law relating to the confidentiality of the information. Section 3 of this bill deems that the records and files collected as common business registration information by the Secretary of State are confidential and privileged unless an exception applies.

      Section 5 of this bill requires the Secretary of State to assign a unique business identification number to each business entity organized in this State and to each person who is issued a state business registration or who claims to be excluded or exempt from the requirement to obtain a state business registration. Under section 4: (1) the Secretary of State must cause the state business portal to interface with the system used by the Secretary of State to assign business identification numbers; and (2) state and local agencies and health districts that issue licenses, certificates, registrations, permits or similar types of authorization to conduct a business in this State or to engage in an occupation or profession in this State must require an applicant for such a license, certificate, registration or permit to include the applicant’s business identification number on the application.

      Sections 7 and 8 of this bill amend provisions governing city and county business licenses so that certain information regarding industrial insurance is provided through the state business portal. Section 9 of this bill removes the provision from existing law which prohibits a county clerk, in certain circumstances, from refusing to accept for filing a certificate or renewal certificate concerning persons doing business in this State under an assumed or fictitious name that is filed by a foreign artificial person or persons. Section 10 of this bill authorizes the Employment Security Division of the Department of Employment, Training and Rehabilitation to make certain information available to the Secretary of State for certain purposes related to operating and maintaining the state business portal. Section 12 of this bill repeals certain provisions relating to: (1) the coordination of the collection of certain information and forms from businesses by state agencies and local governments; and (2) the affidavit required to be filed by an applicant who wishes to obtain a local business license to sell certain retail merchandise. Sections 4.3, 4.6, 6.5 and 7.5 of this bill change the term “state business license” to “state business registration.”

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

      Section 1. Chapter 75A of NRS is hereby amended by adding thereto the provisions set forth as sections 2 and 3 of this act.

      Sec. 2. As used in this chapter, unless the context otherwise requires, “health district” means a health district created pursuant to NRS 439.362 or 439.370.

      Sec. 3. 1.  Except as otherwise provided in subsection 2 and NRS 239.0115, the records and files collected by the Secretary of State pursuant to paragraph (f) of subsection 2 of NRS 75A.100 are confidential and privileged. The Secretary of State and any employee of the Secretary of State who is authorized to view or use the information in such records or files:

 


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      (a) Shall not disclose any information obtained from such records or files other than specific information contained in the record or file that is deemed a public record; and

      (b) May not be required to produce any of the records, files and information for the inspection of any person or governmental entity or for use in any action or proceeding.

      2.  The records and files collected pursuant to paragraph (f) of subsection 2 of NRS 75A.100 are not confidential and privileged in the following cases:

      (a) Testimony by the Secretary of State or any employee of the Secretary of State and the production of records, files and information on behalf of the Secretary of State or a person in any action or proceeding before the Secretary of State or a court in this State if that testimony or the records, files or information, or the facts shown thereby, are directly involved in the action or proceeding.

      (b) Delivery to a person or his or her authorized representative of a copy of any document filed by the person pursuant to this chapter.

      (c) Publication by a governmental agency of statistics so classified as to prevent the identification of a particular business or document.

      (d) Exchanges of information with the Secretary of State or a federal agency in accordance with any agreement made and provided for in such cases or disclosure in confidence to any federal agency that requests the information for use by the agency in a civil or criminal investigation or prosecution.

      (e) Disclosure in confidence to the Attorney General or other legal representative of the State or a federal agency in connection with an action or proceeding relating to a taxpayer, or to any agency of this or any other state or the Federal Government charged with the administration or enforcement of laws relating to workers’ compensation, unemployment compensation, public assistance, taxation, labor or gaming or which issues licenses, certificates, registrations, permits or similar types of authorization to conduct a business in this State.

      (f) Disclosure by the Secretary of State for the purpose of collection of a debt, fee or obligation owed to the Secretary of State.

      (g) A business that submits information to the state business portal and agrees to a provision authorizing the release of information contained in the records and files of the state business portal for a purpose which must be specified in the provision.

      Sec. 4. NRS 75A.100 is hereby amended to read as follows:

      75A.100  1.  The Secretary of State shall provide for the establishment of a state business portal to facilitate interaction among businesses and governmental agencies in this State by allowing businesses to conduct necessary transactions with governmental agencies in this State through use of the state business portal.

      2.  The Secretary of State shall:

      (a) Establish, through cooperative efforts [,] and consultation with representatives of state agencies, local governments, health districts and businesses, the standards and requirements necessary to design, build and implement the state business portal;

      (b) Establish the standards and requirements necessary for a state or local agency to participate in the state business portal;

 


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      (c) Authorize a state or local agency to participate in the state business portal if the Secretary of State determines that the agency meets the standards and requirements necessary for such participation [;] and the agency has entered into an agreement for access to the state business portal with the Secretary of State;

      (d) Determine the appropriate requirements to be used by businesses and governmental agencies conducting transactions through use of the state business portal;

      (e) Cause the state business portal to interface with the system established by the Secretary of State to assign business identification numbers;

      (f) For the purpose of coordinating the collection of common information from businesses using the state business portal:

             (1) Establish common business registration information to be collected from businesses by state and local agencies and health districts which issue licenses, certificates, registrations, permits or similar types of authorization to conduct a business in this State, which collect taxes or fees or which conduct other necessary transactions with businesses in this State; and

             (2) Cause the state business portal to exchange the common business registration information among state and local agencies and health districts which participate in the state business portal and which use the common business registration information to issue licenses, certificates, registrations, permits or similar types of authorization to conduct a business in this State, to collect taxes or fees or to conduct other necessary transactions with businesses in this State;

      (g) In carrying out the provisions of this section, consult with the Executive Director of the Office of Economic Development to ensure that the activities of the Secretary of State are consistent with the State Plan for Economic Development developed by the Executive Director pursuant to subsection 2 of NRS 231.053; and

      [(f)](h) Adopt such regulations and take any appropriate action as necessary to carry out the provisions of this chapter.

      3.  Each state agency or health district that issues a license, certificate, registration, permit or similar type of authorization to conduct a business in this State may, to the extent practicable, and each local agency that issues a license, certificate, registration, permit or similar type of authorization to conduct a business in the jurisdiction of the local agency may, as approved by the governing body of the local government:

      (a) Make available on its Internet website any of its applications for a license, certificate, registration, permit or similar type of authorization to conduct a business in this State.

      (b) Accept the electronic transfer of common business registration information from the state business portal for use in any electronic application for a license, certificate, registration, permit or similar type of authorization to conduct a business in this State or for use in an application processing system.

      (c) Integrate with the state business portal any of its applications for a license, certificate, registration, permit or similar type of authorization to conduct a business in this State. As used in this paragraph, “integrate” means to consolidate an electronic application process so that it is capable of collecting and disseminating information to a state or local agency or health district for the processing of the application for a license, certificate, registration, permit or similar type of authorization to conduct a business in this State.

 


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health district for the processing of the application for a license, certificate, registration, permit or similar type of authorization to conduct a business in this State.

      (d) Allow for the acceptance of an electronic signature for a declaration or affirmation under penalty of perjury or as provided for in statute.

      (e) Require an applicant for a license, certificate, registration, permit or similar type of authorization to conduct a business in this State to include in the application the applicant’s business identification number.

      (f) Ensure that the state or local agency or health district, as applicable, is capable of using the state business portal to accept and disseminate to participating state and local agencies and health districts the common business registration information established pursuant to subparagraph (1) of paragraph (f) of subsection 2 which is needed by the state or local agency or health district to issue a license, certificate, registration, permit or similar type of authorization to conduct a business in this State.

      (g) Establish and maintain its rules, data and processes relating to businesses in accordance with the agreement entered into by the state or local agency or health district pursuant to paragraph (c) of subsection 2 and any corresponding technical documentation.

      4.  The provisions of subsection 3 do not require a state or local agency or health district to:

      (a) Disseminate or release information if such action would result in the state or local agency or health district violating any provision of state or federal law relating to the confidentiality of the information.

      (b) Upgrade its information technology system or incur significant expense to comply with the provisions of this section.

      5.  Except as otherwise provided in NRS 239.0115, all records containing technical specifications, processing protocols or programmatic or system architecture of the state business portal, and any other records containing information the disclosure of which would endanger the security of the state business portal, or proprietary information related to the functions, operations, processes or architecture of the state business portal, are deemed confidential and privileged.

      6.  As used in this section:

      (a) “Business identification number” means the number assigned by the Secretary of State pursuant to section 5 of this act to an entity organized pursuant to this title or to a person who is issued a state business registration or who claims to be excluded or exempt from the requirement to obtain a state business registration pursuant to chapter 76 of NRS.

      (b) “Disseminate” means to distribute in an electronic format that is capable of being accepted by participating state and local agencies and health districts and used by participants as the common business registration information used to issue a license, certificate, registration, permit or similar type of authorization, to collect taxes or fees or to conduct other necessary transactions with businesses in this State.

      Sec. 4.3. NRS 76.030 is hereby amended to read as follows:

      76.030  “State business [license”] registration” means the [business license] registration required pursuant to this chapter.

 


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      Sec. 4.6. NRS 76.100 is hereby amended to read as follows:

      76.100  1.  A person shall not conduct a business in this State unless and until the person obtains a state business [license] registration issued by the Secretary of State. If the person is:

      (a) An entity required to file an initial or annual list with the Secretary of State pursuant to this title, the person must obtain the state business [license] registration at the time of filing the initial or annual list.

      (b) Not an entity required to file an initial or annual list with the Secretary of State pursuant to this title, the person must obtain the state business [license] registration before conducting a business in this State.

      2.  An application for a state business [license] registration must:

      (a) Be made upon a form prescribed by the Secretary of State;

      (b) Set forth the name under which the applicant transacts or intends to transact business, or if the applicant is an entity organized pursuant to this title and on file with the Secretary of State, the exact name on file with the Secretary of State, the [entity] business identification number as assigned by the Secretary of State [, if known,] pursuant to section 5 of this act, and the location in this State of the place or places of business;

      (c) Be accompanied by a fee in the amount of $100; and

      (d) Include any other information that the Secretary of State deems necessary.

Ê If the applicant is an entity organized pursuant to this title and on file with the Secretary of State and the applicant has no location in this State of its place of business, the address of its registered agent shall be deemed to be the location in this State of its place of business.

      3.  The application must be signed pursuant to NRS 239.330 by:

      (a) The owner of a business that is owned by a natural person.

      (b) A member or partner of an association or partnership.

      (c) A general partner of a limited partnership.

      (d) A managing partner of a limited-liability partnership.

      (e) A manager or managing member of a limited-liability company.

      (f) An officer of a corporation or some other person specifically authorized by the corporation to sign the application.

      4.  If the application for a state business [license] registration is defective in any respect or the fee required by this section is not paid, the Secretary of State may return the application for correction or payment.

      5.  The state business [license] registration required to be obtained pursuant to this section is in addition to any license to conduct business that must be obtained from the local jurisdiction in which the business is being conducted.

      6.  For the purposes of this chapter, a person shall be deemed to conduct a business in this State if a business for which the person is responsible:

      (a) Is organized pursuant to this title, other than a business organized pursuant to:

             (1) Chapter 82 or 84 of NRS; or

             (2) Chapter 81 of NRS if the business is a nonprofit religious, charitable, fraternal or other organization that qualifies as a tax-exempt organization pursuant to 26 U.S.C. § 501(c).

      (b) Has an office or other base of operations in this State;

      (c) Has a registered agent in this State; or

      (d) Pays wages or other remuneration to a natural person who performs in this State any of the duties for which he or she is paid.

 


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      7.  As used in this section, “registered agent” has the meaning ascribed to it in NRS 77.230.

      Sec. 5. Chapter 225 of NRS is hereby amended by adding thereto a new section to read as follows:

      For the purpose of establishing the identity of an entity organized pursuant to title 7 of NRS or a person who is issued a state business registration pursuant to chapter 76 of NRS or who claims to be excluded or exempt from the requirement to obtain a state business registration pursuant to NRS 76.105, the Secretary of State shall assign a unique business identification number to each such entity or person.

      Sec. 6. NRS 239.010 is hereby amended to read as follows:

      239.010  1.  Except as otherwise provided in this section and NRS 1.4683, 1A.110, 49.095, 62D.420, 62D.440, 62E.516, 62E.620, 62H.025, 62H.030, 62H.170, 62H.220, 62H.320, 75A.100, 76.160, 78.152, 80.113, 81.850, 82.183, 86.246, 86.54615, 87.515, 87.5413, 87A.200, 87A.580, 87A.640, 88.3355, 88.5927, 88.6067, 88A.345, 88A.7345, 89.045, 89.251, 90.730, 91.160, 116.757, 116A.270, 116B.880, 118B.026, 119.260, 119.265, 119.267, 119.280, 119A.280, 119A.653, 119B.370, 119B.382, 120A.690, 125.130, 125B.140, 126.141, 126.161, 126.163, 126.730, 127.007, 127.057, 127.130, 127.140, 127.2817, 130.312, 159.044, 172.075, 172.245, 176.015, 176.0625, 176.09129, 176.156, 176A.630, 178.39801, 178.4715, 178.5691, 179.495, 179A.070, 179A.165, 179A.450, 179D.160, 200.3771, 200.3772, 200.5095, 200.604, 202.3662, 205.4651, 209.392, 209.3925, 209.419, 209.521, 211A.140, 213.010, 213.040, 213.095, 213.131, 217.105, 217.110, 217.464, 217.475, 218E.625, 218F.150, 218G.130, 218G.240, 218G.350, 228.270, 228.450, 228.495, 228.570, 231.069, 233.190, 237.300, 239.0105, 239.0113, 239B.030, 239B.040, 239B.050, 239C.140, 239C.210, 239C.230, 239C.250, 239C.270, 240.007, 241.020, 241.030, 242.105, 244.264, 244.335, 250.087, 250.130, 250.140, 250.150, 268.095, 268.490, 268.910, 271A.105, 281.195, 281A.350, 281A.440, 281A.550, 284.4068, 286.110, 287.0438, 289.025, 289.080, 289.387, 293.5002, 293.503, 293.558, 293B.135, 293D.510, 331.110, 332.061, 332.351, 333.333, 333.335, 338.070, 338.1379, 338.1725, 338.1727, 348.420, 349.597, 349.775, 353.205, 353A.085, 353A.100, 353C.240, 360.240, 360.247, 360.255, 360.755, 361.044, 361.610, 365.138, 366.160, 368A.180, 372A.080, 378.290, 378.300, 379.008, 386.655, 387.626, 387.631, 388.5275, 388.528, 388.5315, 388.750, 391.035, 392.029, 392.147, 392.264, 392.271, 392.652, 392.850, 394.167, 394.1698, 394.447, 394.460, 394.465, 396.3295, 396.405, 396.525, 396.535, 398.403, 408.3885, 408.3886, 412.153, 416.070, 422.290, 422.305, 422A.320, 422A.350, 425.400, 427A.1236, 427A.872, 432.205, 432B.175, 432B.280, 432B.290, 432B.407, 432B.430, 432B.560, 433.534, 433A.360, 439.270, 439.840, 439B.420, 440.170, 441A.195, 441A.220, 441A.230, 442.330, 442.395, 445A.665, 445B.570, 449.209, 449.245, 449.720, 453.1545, 453.720, 453A.610, 453A.700, 458.055, 458.280, 459.050, 459.3866, 459.555, 459.7056, 459.846, 463.120, 463.15993, 463.240, 463.3403, 463.3407, 463.790, 467.1005, 467.137, 481.063, 482.170, 482.5536, 483.340, 483.363, 483.800, 484E.070, 485.316, 503.452, 522.040, 534A.031, 561.285, 571.160, 584.583, 584.655, 598.0964, 598.0979, 598.098, 598A.110, 599B.090, 603.070, 603A.210, 604A.710, 612.265, 616B.012, 616B.015, 616B.315, 616B.350, 618.341, 618.425, 622.310, 623.131, 623A.353, 624.110, 624.265, 624.327, 625.425, 625A.185, 628.418, 629.069, 630.133, 630.30665, 630.336, 630A.555, 631.368, 632.121, 632.125, 632.405, 633.283, 633.301, 633.524, 634.212, 634.214, 634A.185, 635.158, 636.107, 637.085, 637A.315, 637B.288, 638.087, 638.089, 639.2485, 639.

 


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631.368, 632.121, 632.125, 632.405, 633.283, 633.301, 633.524, 634.212, 634.214, 634A.185, 635.158, 636.107, 637.085, 637A.315, 637B.288, 638.087, 638.089, 639.2485, 639.570, 640.075, 640A.220, 640B.730, 640C.400, 640C.745, 640C.760, 640D.190, 640E.340, 641.090, 641A.191, 641B.170, 641C.760, 642.524, 643.189, 644.446, 645.180, 645.625, 645A.050, 645A.082, 645B.060, 645B.092, 645C.220, 645C.225, 645D.130, 645D.135, 645E.300, 645E.375, 645G.510, 645H.320, 645H.330, 647.0945, 647.0947, 648.033, 648.197, 649.065, 649.067, 652.228, 654.110, 656.105, 661.115, 665.130, 665.133, 669.275, 669.285, 669A.310, 671.170, 673.430, 675.380, 676A.340, 676A.370, 677.243, 679B.122, 679B.152, 679B.159, 679B.190, 679B.285, 679B.690, 680A.270, 681A.440, 681B.260, 681B.280, 683A.0873, 685A.077, 686A.289, 686B.170, 686C.306, 687A.110, 687A.115, 687C.010, 688C.230, 688C.480, 688C.490, 692A.117, 692C.190, 692C.420, 693A.480, 693A.615, 696B.550, 703.196, 704B.320, 704B.325, 706.1725, 710.159, 711.600 [,] and section 3 of this act and sections 35, 38 and 41 of chapter 478, Statutes of Nevada 2011 and section 2 of chapter 391, Statutes of Nevada 2013 and unless otherwise declared by law to be confidential, all public books and public records of a governmental entity must be open at all times during office hours to inspection by any person, and may be fully copied or an abstract or memorandum may be prepared from those public books and public records. Any such copies, abstracts or memoranda may be used to supply the general public with copies, abstracts or memoranda of the records or may be used in any other way to the advantage of the governmental entity or of the general public. This section does not supersede or in any manner affect the federal laws governing copyrights or enlarge, diminish or affect in any other manner the rights of a person in any written book or record which is copyrighted pursuant to federal law.

      2.  A governmental entity may not reject a book or record which is copyrighted solely because it is copyrighted.

      3.  A governmental entity that has legal custody or control of a public book or record shall not deny a request made pursuant to subsection 1 to inspect or copy or receive a copy of a public book or record on the basis that the requested public book or record contains information that is confidential if the governmental entity can redact, delete, conceal or separate the confidential information from the information included in the public book or record that is not otherwise confidential.

      4.  A person may request a copy of a public record in any medium in which the public record is readily available. An officer, employee or agent of a governmental entity who has legal custody or control of a public record:

      (a) Shall not refuse to provide a copy of that public record in a readily available medium because the officer, employee or agent has already prepared or would prefer to provide the copy in a different medium.

      (b) Except as otherwise provided in NRS 239.030, shall, upon request, prepare the copy of the public record and shall not require the person who has requested the copy to prepare the copy himself or herself.

      Sec. 6.5. NRS 244.335 is hereby amended to read as follows:

      244.335  1.  Except as otherwise provided in subsections 2, 3 and 4, and NRS 244.33501, a board of county commissioners may:

      (a) Except as otherwise provided in NRS 244.331 to 244.3345, inclusive, 598D.150 and 640C.100, regulate all character of lawful trades, callings, industries, occupations, professions and business conducted in its county outside of the limits of incorporated cities and towns.

 


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industries, occupations, professions and business conducted in its county outside of the limits of incorporated cities and towns.

      (b) Except as otherwise provided in NRS 244.3359 and 576.128, fix, impose and collect a license tax for revenue or for regulation, or for both revenue and regulation, on such trades, callings, industries, occupations, professions and business.

      2.  The county license boards have the exclusive power in their respective counties to regulate entertainers employed by an entertainment by referral service and the business of conducting a dancing hall, escort service, entertainment by referral service or gambling game or device permitted by law, outside of an incorporated city. The county license boards may fix, impose and collect license taxes for revenue or for regulation, or for both revenue and regulation, on such employment and businesses.

      3.  A board of county commissioners shall not require that a person who is licensed as a contractor pursuant to chapter 624 of NRS obtain more than one license to engage in the business of contracting or pay more than one license tax related to engaging in the business of contracting, regardless of the number of classifications or subclassifications of licensing for which the person is licensed pursuant to chapter 624 of NRS.

      4.  The board of county commissioners or county license board shall not require a person to obtain a license or pay a license tax on the sole basis that the person is a professional. As used in this subsection, “professional” means a person who:

      (a) Holds a license, certificate, registration, permit or similar type of authorization issued by a regulatory body as defined in NRS 622.060 or who is regulated pursuant to the Nevada Supreme Court Rules; and

      (b) Practices his or her profession for any type of compensation as an employee.

      5.  The county license board shall provide upon request an application for a state business [license] registration pursuant to chapter 76 of NRS. No license to engage in any type of business may be granted unless the applicant for the license:

      (a) Signs an affidavit affirming that the business has complied with the provisions of chapter 76 of NRS; or

      (b) Provides to the county license board the [entity] business identification number of the applicant assigned by the Secretary of State pursuant to section 5 of this act which the county may use to validate that the applicant is currently in good standing with the State and has complied with the provisions of chapter 76 of NRS.

      6.  No license to engage in business as a seller of tangible personal property may be granted unless the applicant for the license:

      (a) Presents written evidence that:

             (1) The Department of Taxation has issued or will issue a permit for this activity, and this evidence clearly identifies the business by name; or

             (2) Another regulatory agency of the State has issued or will issue a license required for this activity; or

      (b) Provides to the county license board the [entity] business identification number of the applicant assigned by the Secretary of State pursuant to section 5 of this act which the county may use to validate that the applicant is currently in good standing with the State and has complied with the provisions of paragraph (a).

 


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      7.  Any license tax levied for the purposes of NRS 244.3358 or 244A.597 to 244A.655, inclusive, constitutes a lien upon the real and personal property of the business upon which the tax was levied until the tax is paid. The lien has the same priority as a lien for general taxes. The lien must be enforced:

      (a) By recording in the office of the county recorder, within 6 months after the date on which the tax became delinquent or was otherwise determined to be due and owing, a notice of the tax lien containing the following:

             (1) The amount of tax due and the appropriate year;

             (2) The name of the record owner of the property;

             (3) A description of the property sufficient for identification; and

             (4) A verification by the oath of any member of the board of county commissioners or the county fair and recreation board; and

      (b) By an action for foreclosure against the property in the same manner as an action for foreclosure of any other lien, commenced within 2 years after the date of recording of the notice of the tax lien, and accompanied by appropriate notice to other lienholders.

      8.  The board of county commissioners may delegate the authority to enforce liens from taxes levied for the purposes of NRS 244A.597 to 244A.655, inclusive, to the county fair and recreation board. If the authority is so delegated, the board of county commissioners shall revoke or suspend the license of a business upon certification by the county fair and recreation board that the license tax has become delinquent, and shall not reinstate the license until the tax is paid. Except as otherwise provided in NRS 239.0115 and 244.3357, all information concerning license taxes levied by an ordinance authorized by this section or other information concerning the business affairs or operation of any licensee obtained as a result of the payment of such license taxes or as the result of any audit or examination of the books by any authorized employee of a county fair and recreation board of the county for any license tax levied for the purpose of NRS 244A.597 to 244A.655, inclusive, is confidential and must not be disclosed by any member, officer or employee of the county fair and recreation board or the county imposing the license tax unless the disclosure is authorized by the affirmative action of a majority of the members of the appropriate county fair and recreation board. Continuing disclosure may be so authorized under an agreement with the Department of Taxation or Secretary of State for the exchange of information concerning taxpayers.

      Sec. 7. NRS 244.33505 is hereby amended to read as follows:

      244.33505  1.  In a county in which a license to engage in a business is required, the board of county commissioners shall not issue such a license unless the applicant for the license:

      (a) Signs an affidavit affirming that the business:

             (1) Has received coverage by a private carrier as required pursuant to chapters 616A to 616D, inclusive, and chapter 617 of NRS;

             (2) Maintains a valid certificate of self-insurance pursuant to chapters 616A to 616D, inclusive, of NRS;

             (3) Is a member of an association of self-insured public or private employers; or

             (4) Is not subject to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS; or

 


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      (b) If the applicant submits his or her application electronically, attests to his or her compliance with the provisions of paragraph (a).

      2.  In a county in which such a license is not required, the board of county commissioners shall require a business, when applying for a post office box, to submit to the board the affidavit or attestation required by subsection 1.

      3.  [Each] Except as otherwise provided in this subsection, each board of county commissioners shall submit to the Administrator of the Division of Industrial Relations of the Department of Business and Industry monthly a [list] report of the names of those businesses which have submitted an affidavit or attestation required by subsections 1 and 2. A board of county commissioners is not required to include in the monthly report the name of a business which has submitted an attestation electronically via the state business portal.

      4.  [Upon] Except as otherwise provided in subsection 5, upon receiving an affidavit [or attestation] required by this section, a board of county commissioners shall provide the owner of the business with a document setting forth the rights and responsibilities of employers and employees to promote safety in the workplace, in accordance with regulations adopted by the Division of Industrial Relations of the Department of Business and Industry pursuant to NRS 618.376.

      5.  If a business submits an attestation required by this section electronically via the state business portal, the state business portal shall provide the owner of the business with access to information setting forth the rights and responsibilities of employers and employees to promote safety in the workplace, in accordance with regulations adopted by the Division of Industrial Relations of the Department of Business and Industry pursuant to NRS 618.376.

      6.  As used in this section, “state business portal” means the state business portal established pursuant to chapter 75A of NRS.

      Sec. 7.5. NRS 268.095 is hereby amended to read as follows:

      268.095  1.  Except as otherwise provided in subsection 4 and NRS 268.0951, the city council or other governing body of each incorporated city in this State, whether organized under general law or special charter, may:

      (a) Except as otherwise provided in subsection 2 and NRS 268.0968 and 576.128, fix, impose and collect for revenues or for regulation, or both, a license tax on all character of lawful trades, callings, industries, occupations, professions and businesses conducted within its corporate limits.

      (b) Assign the proceeds of any one or more of such license taxes to the county within which the city is situated for the purpose or purposes of making the proceeds available to the county:

             (1) As a pledge as additional security for the payment of any general obligation bonds issued pursuant to NRS 244A.597 to 244A.655, inclusive;

             (2) For redeeming any general obligation bonds issued pursuant to NRS 244A.597 to 244A.655, inclusive;

             (3) For defraying the costs of collecting or otherwise administering any such license tax so assigned, of the county fair and recreation board and of officers, agents and employees hired thereby, and of incidentals incurred thereby;

             (4) For operating and maintaining recreational facilities under the jurisdiction of the county fair and recreation board;

 


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             (5) For improving, extending and bettering recreational facilities authorized by NRS 244A.597 to 244A.655, inclusive; and

             (6) For constructing, purchasing or otherwise acquiring such recreational facilities.

      (c) Pledge the proceeds of any tax imposed on the revenues from the rental of transient lodging pursuant to this section for the payment of any general or special obligations issued by the city for a purpose authorized by the laws of this State.

      (d) Use the proceeds of any tax imposed pursuant to this section on the revenues from the rental of transient lodging:

             (1) To pay the principal, interest or any other indebtedness on any general or special obligations issued by the city pursuant to the laws of this State;

             (2) For the expense of operating or maintaining, or both, any facilities of the city; and

             (3) For any other purpose for which other money of the city may be used.

      2.  The city council or other governing body of an incorporated city shall not require that a person who is licensed as a contractor pursuant to chapter 624 of NRS obtain more than one license to engage in the business of contracting or pay more than one license tax related to engaging in the business of contracting, regardless of the number of classifications or subclassifications of licensing for which the person is licensed pursuant to chapter 624 of NRS.

      3.  The proceeds of any tax imposed pursuant to this section that are pledged for the repayment of general obligations may be treated as “pledged revenues” for the purposes of NRS 350.020.

      4.  The city council or other governing body of an incorporated city shall not require a person to obtain a license or pay a license tax on the sole basis that the person is a professional. As used in this subsection, “professional” means a person who:

      (a) Holds a license, certificate, registration, permit or similar type of authorization issued by a regulatory body as defined in NRS 622.060 or who is regulated pursuant to the Nevada Supreme Court Rules; and

      (b) Practices his or her profession for any type of compensation as an employee.

      5.  The city licensing agency shall provide upon request an application for a state business [license] registration pursuant to chapter 76 of NRS. No license to engage in any type of business may be granted unless the applicant for the license:

      (a) Signs an affidavit affirming that the business has complied with the provisions of chapter 76 of NRS; or

      (b) Provides to the city licensing agency the [entity] business identification number of the applicant assigned by the Secretary of State pursuant to section 5 of this act which the city may use to validate that the applicant is currently in good standing with the State and has complied with the provisions of chapter 76 of NRS.

      6.  No license to engage in business as a seller of tangible personal property may be granted unless the applicant for the license:

      (a) Presents written evidence that:

             (1) The Department of Taxation has issued or will issue a permit for this activity, and this evidence clearly identifies the business by name; or

 


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             (2) Another regulatory agency of the State has issued or will issue a license required for this activity; or

      (b) Provides to the city licensing agency the [entity] business identification number of the applicant assigned by the Secretary of State pursuant to section 5 of this act which the city may use to validate that the applicant is currently in good standing with the State and has complied with the provisions of paragraph (a).

      7.  Any license tax levied under the provisions of this section constitutes a lien upon the real and personal property of the business upon which the tax was levied until the tax is paid. The lien has the same priority as a lien for general taxes. The lien must be enforced:

      (a) By recording in the office of the county recorder, within 6 months following the date on which the tax became delinquent or was otherwise determined to be due and owing, a notice of the tax lien containing the following:

             (1) The amount of tax due and the appropriate year;

             (2) The name of the record owner of the property;

             (3) A description of the property sufficient for identification; and

             (4) A verification by the oath of any member of the board of county commissioners or the county fair and recreation board; and

      (b) By an action for foreclosure against such property in the same manner as an action for foreclosure of any other lien, commenced within 2 years after the date of recording of the notice of the tax lien, and accompanied by appropriate notice to other lienholders.

      8.  The city council or other governing body of each incorporated city may delegate the power and authority to enforce such liens to the county fair and recreation board. If the authority is so delegated, the governing body shall revoke or suspend the license of a business upon certification by the board that the license tax has become delinquent, and shall not reinstate the license until the tax is paid. Except as otherwise provided in NRS 239.0115 and 268.0966, all information concerning license taxes levied by an ordinance authorized by this section or other information concerning the business affairs or operation of any licensee obtained as a result of the payment of those license taxes or as the result of any audit or examination of the books of the city by any authorized employee of a county fair and recreation board for any license tax levied for the purpose of NRS 244A.597 to 244A.655, inclusive, is confidential and must not be disclosed by any member, official or employee of the county fair and recreation board or the city imposing the license tax unless the disclosure is authorized by the affirmative action of a majority of the members of the appropriate county fair and recreation board. Continuing disclosure may be so authorized under an agreement with the Department of Taxation or the Secretary of State for the exchange of information concerning taxpayers.

      9.  The powers conferred by this section are in addition and supplemental to, and not in substitution for, and the limitations imposed by this section do not affect the powers conferred by, any other law. No part of this section repeals or affects any other law or any part thereof, it being intended that this section provide a separate method of accomplishing its objectives, and not an exclusive one.

 


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      Sec. 8. NRS 268.0955 is hereby amended to read as follows:

      268.0955  1.  In an incorporated city in which a license to engage in a business is required, the city council or other governing body of the city shall not issue such a license unless the applicant for the license:

      (a) Signs an affidavit affirming that the business:

             (1) Has received coverage by a private carrier as required pursuant to chapters 616A to 616D, inclusive, and chapter 617 of NRS;

             (2) Maintains a valid certificate of self-insurance pursuant to chapters 616A to 616D, inclusive, of NRS;

             (3) Is a member of an association of self-insured public or private employers; or

             (4) Is not subject to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS; or

      (b) If the applicant submits his or her application electronically, attests to his or her compliance with the provisions of paragraph (a).

      2.  In an incorporated city in which such a license is not required, the city council or other governing body of the city shall require a business, when applying for a post office box, to submit to the governing body the affidavit or attestation required by subsection 1.

      3.  [Each] Except as otherwise provided in this subsection, each city council or other governing body of an incorporated city shall submit to the Administrator of the Division of Industrial Relations of the Department of Business and Industry monthly a [list] report of the names of those businesses which have submitted an affidavit or attestation required by subsections 1 and 2. A city council or other governing board of an incorporated city is not required to include in the monthly report the name of a business which has submitted an attestation electronically via the state business portal.

      4.  [Upon] Except as otherwise provided in subsection 5, upon receiving an affidavit [or attestation] required by this section, the city council or other governing body of an incorporated city shall provide the applicant with a document setting forth the rights and responsibilities of employers and employees to promote safety in the workplace in accordance with regulations adopted by the Division of Industrial Relations of the Department of Business and Industry pursuant to NRS 618.376.

      5.  If a business submits an attestation required by this section electronically via the state business portal, the state business portal shall provide the owner of the business with access to information setting forth the rights and responsibilities of employers and employees to promote safety in the workplace, in accordance with regulations adopted by the Division of Industrial Relations of the Department of Business and Industry pursuant to NRS 618.376.

      6.  As used in this section, “state business portal” means the state business portal established pursuant to chapter 75A of NRS.

      Sec. 9. NRS 602.020 is hereby amended to read as follows:

      602.020  1.  A certificate filed pursuant to NRS 602.010 or a renewal certificate filed pursuant to NRS 602.035 must state the assumed or fictitious name under which the business is being conducted or is intended to be conducted, and if conducted by:

      (a) A natural person:

             (1) His or her full name;

             (2) The street address of his or her residence or business; and

 


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             (3) If the mailing address is different from the street address, the mailing address of his or her residence or business;

      (b) An artificial person:

             (1) Its name; and

             (2) Its mailing address;

      (c) A general partnership:

             (1) The full name of each partner who is a natural person;

             (2) The street address of the residence or business of each partner who is a natural person;

             (3) If the mailing address is different from the street address, the mailing address of the residence or business of each partner who is a natural person; and

             (4) If one or more of the partners is an artificial person described in paragraph (b), the information required by paragraph (b) for each such partner; or

      (d) A trust:

             (1) The full name of each trustee of the trust;

             (2) The street address of the residence or business of each trustee of the trust; and

             (3) If the mailing address is different from the street address, the mailing address of the residence or business of each trustee of the trust.

      2.  The certificate must be:

      (a) Signed:

             (1) In the case of a natural person, by that natural person;

             (2) In the case of an artificial person, by an officer, director, manager, general partner, trustee or other natural person having the authority to bind the artificial person to a contract;

             (3) In the case of a general partnership, by each of the partners who is a natural person and, if one or more of the partners is an artificial person described in subparagraph (2), by the person described in subparagraph (2); or

             (4) In the case of a trust, by each of the trustees; and

      (b) Notarized, unless the board of county commissioners of the county adopts an ordinance providing that the certificate may be filed without being notarized.

      3.  [No county clerk may refuse to accept for filing a certificate filed by a foreign artificial person or foreign artificial persons because the foreign artificial person or foreign artificial persons have not qualified to do business in this State under title 7 of NRS.

      4.]  As used in this section:

      (a) “Artificial person” means any organization organized under the law of the United States, any foreign country, or a state, province, territory, possession, commonwealth or dependency of the United States or any foreign country, and as to which the government, state, province, territory, possession, commonwealth or dependency must maintain a record showing the organization to have been organized.

      (b) [“Foreign artificial person” means an artificial person that is not organized under the laws of this State.

      (c)] “Record” means information which is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.

 


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      Sec. 10. NRS 612.265 is hereby amended to read as follows:

      612.265  1.  Except as otherwise provided in this section and NRS 239.0115 and 612.642, information obtained from any employing unit or person pursuant to the administration of this chapter and any determination as to the benefit rights of any person is confidential and may not be disclosed or be open to public inspection in any manner which would reveal the person’s or employing unit’s identity.

      2.  Any claimant or a legal representative of a claimant is entitled to information from the records of the Division, to the extent necessary for the proper presentation of the claimant’s claim in any proceeding pursuant to this chapter. A claimant or an employing unit is not entitled to information from the records of the Division for any other purpose.

      3.  Subject to such restrictions as the Administrator may by regulation prescribe, the information obtained by the Division may be made available to:

      (a) Any agency of this or any other state or any federal agency charged with the administration or enforcement of laws relating to unemployment compensation, public assistance, workers’ compensation or labor and industrial relations, or the maintenance of a system of public employment offices;

      (b) Any state or local agency for the enforcement of child support;

      (c) The Internal Revenue Service of the Department of the Treasury;

      (d) The Department of Taxation; [and]

      (e) The State Contractors’ Board in the performance of its duties to enforce the provisions of chapter 624 of NRS [.] ; and

      (f) The Secretary of State to operate the state business portal established pursuant to chapter 75A of NRS for the purposes of verifying that data submitted via the portal has satisfied the necessary requirements established by the Division, and as necessary to maintain the technical integrity and functionality of the state business portal established pursuant to chapter 75A of NRS.

Ê Information obtained in connection with the administration of the Division may be made available to persons or agencies for purposes appropriate to the operation of a public employment service or a public assistance program.

      4.  Upon written request made by a public officer of a local government, the Administrator shall furnish from the records of the Division the name, address and place of employment of any person listed in the records of employment of the Division. The request must set forth the social security number of the person about whom the request is made and contain a statement signed by the proper authority of the local government certifying that the request is made to allow the proper authority to enforce a law to recover a debt or obligation owed to the local government. Except as otherwise provided in NRS 239.0115, the information obtained by the local government is confidential and may not be used or disclosed for any purpose other than the collection of a debt or obligation owed to that local government. The Administrator may charge a reasonable fee for the cost of providing the requested information.

      5.  The Administrator may publish or otherwise provide information on the names of employers, their addresses, their type or class of business or industry, and the approximate number of employees employed by each such employer, if the information released will assist unemployed persons to obtain employment or will be generally useful in developing and diversifying the economic interests of this State.

 


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obtain employment or will be generally useful in developing and diversifying the economic interests of this State. Upon request by a state agency which is able to demonstrate that its intended use of the information will benefit the residents of this State, the Administrator may, in addition to the information listed in this subsection, disclose the number of employees employed by each employer and the total wages paid by each employer. The Administrator may charge a fee to cover the actual costs of any administrative expenses relating to the disclosure of this information to a state agency. The Administrator may require the state agency to certify in writing that the agency will take all actions necessary to maintain the confidentiality of the information and prevent its unauthorized disclosure.

      6.  Upon request therefor, the Administrator shall furnish to any agency of the United States charged with the administration of public works or assistance through public employment, and may furnish to any state agency similarly charged, the name, address, ordinary occupation and employment status of each recipient of benefits and the recipient’s rights to further benefits pursuant to this chapter.

      7.  To further a current criminal investigation, the chief executive officer of any law enforcement agency of this State may submit a written request to the Administrator that the Administrator furnish, from the records of the Division, the name, address and place of employment of any person listed in the records of employment of the Division. The request must set forth the social security number of the person about whom the request is made and contain a statement signed by the chief executive officer certifying that the request is made to further a criminal investigation currently being conducted by the agency. Upon receipt of such a request, the Administrator shall furnish the information requested. The Administrator may charge a fee to cover the actual costs of any related administrative expenses.

      8.  In addition to the provisions of subsection 5, the Administrator shall provide lists containing the names and addresses of employers, and information regarding the wages paid by each employer to the Department of Taxation, upon request, for use in verifying returns for the taxes imposed pursuant to chapters 363A and 363B of NRS. The Administrator may charge a fee to cover the actual costs of any related administrative expenses.

      9.  A private carrier that provides industrial insurance in this State shall submit to the Administrator a list containing the name of each person who received benefits pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS during the preceding month and request that the Administrator compare the information so provided with the records of the Division regarding persons claiming benefits pursuant to this chapter for the same period. The information submitted by the private carrier must be in a form determined by the Administrator and must contain the social security number of each such person. Upon receipt of the request, the Administrator shall make such a comparison and, if it appears from the information submitted that a person is simultaneously claiming benefits under this chapter and under chapters 616A to 616D, inclusive, or chapter 617 of NRS, the Administrator shall notify the Attorney General or any other appropriate law enforcement agency. The Administrator shall charge a fee to cover the actual costs of any related administrative expenses.

      10.  The Administrator may request the Comptroller of the Currency of the United States to cause an examination of the correctness of any return or report of any national banking association rendered pursuant to the provisions of this chapter, and may in connection with the request transmit any such report or return to the Comptroller of the Currency of the United States as provided in section 3305(c) of the Internal Revenue Code of 1954.

 


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provisions of this chapter, and may in connection with the request transmit any such report or return to the Comptroller of the Currency of the United States as provided in section 3305(c) of the Internal Revenue Code of 1954.

      11.  If any employee or member of the Board of Review, the Administrator or any employee of the Administrator, in violation of the provisions of this section, discloses information obtained from any employing unit or person in the administration of this chapter, or if any person who has obtained a list of applicants for work, or of claimants or recipients of benefits pursuant to this chapter uses or permits the use of the list for any political purpose, he or she is guilty of a gross misdemeanor.

      12.  All letters, reports or communications of any kind, oral or written, from the employer or employee to each other or to the Division or any of its agents, representatives or employees are privileged and must not be the subject matter or basis for any lawsuit if the letter, report or communication is written, sent, delivered or prepared pursuant to the requirements of this chapter.

      Sec. 11. (Deleted by amendment.)

      Sec. 12. NRS 237.180, 364.110 and 364.120 are hereby repealed.

      Sec. 12.5.  The Legislative Counsel shall:

      1.  In preparing the Nevada Revised Statutes, use the authority set forth in subsection 10 of NRS 220.120 to substitute appropriately the term “state business registration” for the term “state business license” as previously used, to substitute appropriately the terms “register,” “registered” or “registration” for the terms “license,” “licensed” or “licensing” as previously used in reference to the issuance of a state business license and to substitute appropriately the term “business identification number” for the term “state business license number” as previously used; and

      2.  In preparing supplements to the Nevada Administrative Code, substitute appropriately the term “state business registration” for the term “state business license” as previously used, substitute appropriately the terms “register,” “registered” or “registration” for the terms “license,” “licensed” or “licensing” as previously used in reference to the issuance of a state business license and substitute appropriately the term “business identification number” for the term “state business license number” as previously used.

      Sec. 13.  This act becomes effective on July 1, 2015.

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CHAPTER 522, SB 67

Senate Bill No. 67–Committee on Commerce, Labor and Energy

 

CHAPTER 522

 

[Approved: June 10, 2015]

 

AN ACT relating to insurance; adopting the provisions of various model laws and acts of the National Association of Insurance Commissioners; setting forth the manner in which the Commissioner of Insurance may adopt the Valuation Manual adopted by the National Association of Insurance Commissioners; revising provisions regarding the confidentiality of certain information and materials provided to the Division of Insurance of the Department of Business and Industry; revising provisions regarding the requirements for annual financial statements filed by self-insured employers for workers’ compensation; revising provisions regarding licensing requirements; revising provisions regarding the cash value of policies of life insurance; allowing insurer’s to issue electronic proof of insurance certificates for automobiles; revising provisions governing state-chartered risk retention groups; authorizing the Division to access certain sealed records of licensees and applicants for licenses; and providing other matters properly relating thereto.

Legislative Counsel’s Digest:

      Sections 1-18 of this bill make changes to chapter 681A of NRS in conformance with amendments to the National Association of Insurance Commissioners’ Credit for Reinsurance Model Law. Sections 23-39.5 and 41 of this bill adopt certain provisions of the National Association of Insurance Commissioners’ Standard Valuation Law. Section 33.7 of this bill describes the Valuation Manual and sets forth the criteria for determining the date on which the Valuation Manual becomes operative. Sections 33.3 and 33.7-36 of this bill describe the minimum standards for the valuation of reserves associated with policies and contracts of insurance issued on or after the operative date of the Valuation Manual. Section 33.5 of this bill sets forth the requirements for actuarial opinions of reserves prepared after the operative date of the Valuation Manual. Sections 40.15-40.43 of this bill revise certain existing provisions to apply before the operative date of the Valuation Manual, as specified. Section 41 makes changes regarding the confidentiality of documents and information which constitute a memorandum in support of an actuarial opinion submitted by an insurer to the Commissioner pursuant to NRS 681B.230, including materials provided by the insurer to the Commissioner in connection with the memorandum. Sections 43-230 of this bill adopt the provisions of the National Association of Insurance Commissioners’ Investments of Insurers Model Act (Defined Limits Version). Sections 233 and 318 of this bill make changes to the requirements for insurance administrators and self-insured employers for workers’ compensation when filing their annual financial statements. Sections 234-238 of this bill make various changes to the licensing requirements for producers of insurance. Sections 241-253 of this bill adopt certain provisions of the National Association of Insurance Commissioners’ Life and Health Insurance Guaranty Association Model Act. Sections 254 and 256 of this bill add coverage for assumed claims transactions to the Nevada Insurance Guaranty Association. Section 258 of this bill makes changes to certain provisions relating to the cash values of policies of life insurance. Sections 263 and 317 of this bill allow insurers to provide electronic proof of insurance certificates for motor vehicles. Sections 265-289 of this bill adopt the provisions of the National Association of Insurance Commissioners’ Risk Management and Own Risk and Solvency Assessment Model Act. Sections 290-303 of this bill adopt various amendments to the National Association of Insurance Commissioners’ Insurance Holding Company System Regulatory Act.

 


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of this bill adopt various amendments to the National Association of Insurance Commissioners’ Insurance Holding Company System Regulatory Act. Sections 307-311 of this bill make changes regarding state-chartered risk retention groups. Sections 312 and 313 of this bill authorize the Division of Insurance of the Department of Business and Industry to inspect certain sealed records to determine the suitability of an applicant for a license or the discipline of a licensee for misconduct. Section 319 of this bill repeals various provisions of existing law which are replaced by various sections of this bill.

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

      Section 1. NRS 680B.050 is hereby amended to read as follows:

      680B.050  1.  Except as otherwise provided in this section, a domestic or foreign insurer, including, without limitation, an insurer that is exempt from federal taxation pursuant to 26 U.S.C. § 501(c)(29), which owns and substantially occupies and uses any building in this state as its home office or as a regional home office is entitled to the following credits against the tax otherwise imposed by NRS 680B.027:

      (a) An amount equal to 50 percent of the aggregate amount of the tax as determined under NRS 680B.025 to 680B.039, inclusive; and

      (b) An amount equal to the full amount of ad valorem taxes paid by the insurer during the calendar year next preceding the filing of the report required by NRS 680B.030, upon the home office or regional home office together with the land, as reasonably required for the convenient use of the office, upon which the home office or regional home office is situated.

Ê These credits must not reduce the amount of tax payable to less than 20 percent of the tax otherwise payable by the insurer under NRS 680B.027.

      2.  As used in this section, a “regional home office” means an office of the insurer performing for an area covering two or more states, with a minimum of 25 employees on its office staff, the supervision, underwriting, issuing and servicing of the insurance business of the insurer.

      3.  The insurer shall, on or before March 15 of each year, furnish proof to the satisfaction of the Executive Director of the Department of Taxation, on forms furnished by or acceptable to the Executive Director, as to its entitlement to the tax reduction provided for in this section. A determination of the Executive Director of the Department of Taxation pursuant to this section is not binding upon the Commissioner for the purposes of [NRS 682A.240.] sections 174 to 177, inclusive, of this act.

      4.  An insurer is not entitled to the credits provided in this section unless:

      (a) The insurer owned the property upon which the reduction is based for the entire year for which the reduction is claimed; and

      (b) The insurer occupied at least 70 percent of the usable space in the building to transact insurance or the insurer is a general or limited partner and occupies 100 percent of its ownership interest in the building.

      5.  If two or more insurers under common ownership or management and control jointly own in equal interest, and jointly occupy and use such a home office or regional home office in this state for the conduct and administration of their respective insurance businesses as provided in this section, each of the insurers is entitled to the credits provided for by this section if otherwise qualified therefor under this section.

 


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section, each of the insurers is entitled to the credits provided for by this section if otherwise qualified therefor under this section.

      6.  For the purposes of subsection 1, any insurer that is exempt from federal taxation pursuant to 26 U.S.C. § 501(c)(29) and is restricted or prohibited from purchasing or owning real property pursuant to a contract with the Federal Government, including any entity thereof, shall be deemed to own any portion of any real property that the insurer occupies. The provisions of this subsection expire upon the expiration, cancellation, repayment or any other termination of the contract restricting or prohibiting such purchase or ownership.

      Sec. 2. NRS 680C.110 is hereby amended to read as follows:

      680C.110  1.  In addition to any other fee or charge, the Commissioner shall collect in advance and receipt for, and persons so served must pay to the Commissioner, the fees required by this section.

      2.  A fee required by this section must be:

      (a) If an initial fee, paid at the time of an initial application or issuance of a license, as applicable;

      (b) If an annual fee, paid on or before March 1 of every year;

      (c) If a triennial fee, paid on or before the time of continuation, renewal or other similar action in regard to a certificate, license, permit or other type of authorization, as applicable; and

      (d) Deposited in the Fund for Insurance Administration and Enforcement created by NRS 680C.100.

      3.  The fees required pursuant to this section are not refundable.

      4.  The following fees must be paid by the following persons to the Commissioner:

      (a) Associations of self-insured private employers, as defined in NRS 616A.050:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      (b) Associations of self-insured public employers, as defined in NRS 616A.055:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      (c) Independent review organizations, as provided for in NRS 616A.469 or 683A.3715, or both:

             (1) Initial fee............................................................................................. $60

             (2) Annual fee.......................................................................................... $60

      (d) Insurers not otherwise provided for in this subsection:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      (e) Producers of insurance, as defined in NRS 679A.117:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      (f) [Accredited reinsurers,] Reinsurers, as provided for in NRS 681A.160 [:] or section 5 of this act, as applicable:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      (g) Intermediaries, as defined in NRS 681A.330:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

 


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      (h) Reinsurers, as defined in NRS 681A.370:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      (i) Administrators, as defined in NRS 683A.025:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      (j) Managing general agents, as defined in NRS 683A.060:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      (k) Agents who perform utilization reviews, as defined in NRS 683A.376:

             (1) Initial fee............................................................................................. $60

             (2) Annual fee.......................................................................................... $60

      (l) Insurance consultants, as defined in NRS 683C.010:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      (m) Independent adjusters, as defined in NRS 684A.030:

            (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      (n) Public adjusters, as defined in NRS 684A.030:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      (o) Associate adjusters, as defined in NRS 684A.030:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      (p) Motor vehicle physical damage appraisers, as defined in NRS 684B.010:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      (q) Brokers, as defined in NRS 685A.031:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      (r) [Eligible surplus line insurers, as provided for in NRS 685A.070:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      (s)] Companies, as defined in NRS 686A.330:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      [(t)] (s) Rate service organizations, as defined in NRS 686B.020:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      [(u)] (t) Brokers of viatical settlements, as defined in NRS 688C.030:

             (1) Initial fee............................................................................................. $60

             (2) Annual fee.......................................................................................... $60

      [(v)] (u) Providers of viatical settlements, as defined in NRS 688C.080:

             (1) Initial fee............................................................................................. $60

             (2) Annual fee.......................................................................................... $60

 


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      [(w)] (v) Agents for prepaid burial contracts subject to the provisions of chapter 689 of NRS:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      [(x)] (w) Agents for prepaid funeral contracts subject to the provisions of chapter 689 of NRS:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      [(y)] (x) Sellers of prepaid burial contracts subject to the provisions of chapter 689 of NRS:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      [(z)] (y) Sellers of prepaid funeral contracts subject to the provisions of chapter 689 of NRS:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      [(aa)] (z) Providers, as defined in NRS 690C.070:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      [(bb)] (aa) Escrow officers, as defined in NRS 692A.028:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      [(cc)] (bb) Title agents, as defined in NRS 692A.060:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      [(dd)] (cc) Captive insurers, as defined in NRS 694C.060:

             (1) Initial fee.......................................................................................... $250

             (2) Annual fee........................................................................................ $250

      [(ee)] (dd) Fraternal benefit societies, as defined in NRS 695A.010:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      [(ff)] (ee) Insurance agents for societies, as provided for in NRS 695A.330:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      [(gg)] (ff) Corporations subject to the provisions of chapter 695B of NRS:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      [(hh)] (gg) Health maintenance organizations, as defined in NRS 695C.030:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      [(ii)] (hh) Organizations for dental care, as defined in NRS 695D.060:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      [(jj)] (ii) Purchasing groups, as defined in NRS 695E.100:

             (1) Initial fee.......................................................................................... $250

             (2) Annual fee........................................................................................ $250

 


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      [(kk)] (jj) Risk retention groups, as defined in NRS 695E.110:

             (1) Initial fee.......................................................................................... $250

             (2) Annual fee........................................................................................ $250

      [(ll)] (kk) Prepaid limited health service organizations, as defined in NRS 695F.050:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      [(mm)] (ll) Medical discount plans, as defined in NRS 695H.050:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      [(nn)] (mm) Club agents, as defined in NRS 696A.040:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      [(oo)] (nn) Motor clubs, as defined in NRS 696A.050:

             (1) Initial fee....................................................................................... $1,300

             (2) Annual fee.................................................................................... $1,300

      [(pp)] (oo) Bail agents, as defined in NRS 697.040:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      [(qq)] (pp) Bail enforcement agents, as defined in NRS 697.055:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      [(rr)] (qq) Bail solicitors, as defined in NRS 697.060:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      [(ss)] (rr) General agents, as defined in NRS 697.070:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      [(tt)] (ss) Exchange enrollment facilitators, as defined in NRS 695J.050:

             (1) Initial fee............................................................................................. $60

             (2) Triennial fee....................................................................................... $60

      Sec. 3. Chapter 681A of NRS is hereby amended by adding thereto the provisions set forth as sections 4 to 12, inclusive, of this act.

      Sec. 4. Credit must be allowed when the reinsurance is ceded to an assuming insurer that has been certified by the Commissioner as a reinsurer in this State and secures its obligations in accordance with the requirements of this chapter.

      Sec. 5. To be eligible for certification, an assuming insurer must:

      1.  Be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the Commissioner pursuant to section 7 of this act;

      2.  Maintain minimum capital and surplus, or its equivalent, in an amount to be determined by the Commissioner;

      3.  Maintain financial strength ratings from two or more rating agencies deemed acceptable by the Commissioner;

      4.  Agree to submit to the jurisdiction of this State, appoint the Commissioner as its agent for service of process in this State and agree to provide security for 100 percent of the assuming insurer’s liabilities attributable to reinsurance ceded by ceding insurers in the United States for use if the assuming insurer resists enforcement of a final judgment rendered by any court of competent jurisdiction in the United States;

 


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      5.  Agree to meet applicable information filing requirements as determined by the Commissioner, both with respect to an initial application for certification and on an ongoing basis; and

      6.  Satisfy any other requirements for certification deemed relevant by the Commissioner.

      Sec. 6. An association that includes incorporated and individual unincorporated underwriters may be a certified reinsurer. In addition to satisfying the requirements of section 5 of this act, to be eligible for certification:

      1.  The association must satisfy its minimum capital and surplus requirements through the capital and surplus equivalents, net of liabilities, of the association and its members, which must include a joint central fund that may be applied to any unsatisfied obligation of the association or any of its members, in an amount determined by the Commissioner to provide adequate protection;

      2.  The incorporated members of the association must not engage in any business other than underwriting as a member of the association and are subject to the same level of regulation and solvency control by the association’s domiciliary regulator as are the unincorporated members; and

      3.  Within 90 days after its financial statements are due to be filed with the association’s domiciliary regulator, the association must provide to the Commissioner an annual certification by the association’s domiciliary regulator of the solvency of each underwriter member or, if a certification is unavailable, financial statements prepared by independent public accountants of each underwriter member.

      Sec. 7. 1.  The Commissioner shall create and publish a list of qualified jurisdictions, pursuant to which an assuming insurer licensed and domiciled in such jurisdiction is eligible to be considered for certification by the Commissioner as a certified reinsurer.

      2.  In order to determine whether the domiciliary jurisdiction of an alien assuming insurer is eligible to be recognized as a qualified jurisdiction, the Commissioner shall evaluate the appropriateness and effectiveness of the reinsurance supervisory system of the jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits and extent of reciprocal recognition afforded by the alien jurisdiction to reinsurers licensed and domiciled in the United States. A qualified jurisdiction must agree to share information and cooperate with the Commissioner with respect to all certified reinsurers domiciled within that jurisdiction. A jurisdiction may not be recognized as a qualified jurisdiction if the Commissioner has determined that the jurisdiction does not adequately and promptly enforce final judgments rendered by a court of competent jurisdiction in the United States. Additional factors may be considered at the discretion of the Commissioner.

      3.  The Commissioner may consider the list of qualified jurisdictions maintained by the National Association of Insurance Commissioners in determining qualified jurisdictions.

      4.  Any jurisdictions that meet the requirements for accreditation pursuant to the National Association of Insurance Commissioners’ financial standards and accreditation program must be recognized as qualified jurisdictions.

 


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      5.  If a certified reinsurer’s domiciliary jurisdiction ceases to be a qualified jurisdiction, the Commissioner may suspend or revoke the reinsurer’s certification.

      Sec. 7.5. The Commissioner shall:

      1.  Assign a rating to each certified reinsurer, giving due consideration to the financial strength ratings which have been assigned to certified reinsurers by rating agencies that the Commissioner deems acceptable pursuant to regulations adopted by the Commissioner; and

      2.  Publish a list of all certified reinsurers and the ratings that he or she has assigned to those certified reinsurers.

      Sec. 8. 1.  For a domestic ceding insurer to qualify for full financial statement credit for reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a form acceptable to the Commissioner and consistent with the provisions of NRS 681A.240 or, in a multi-beneficiary trust, pursuant to NRS 681A.180 and 681A.190, except as otherwise provided in sections 4 to 10, inclusive, of this act.

      2.  If a certified reinsurer maintains a trust to fully secure its obligations subject to NRS 681A.180 and 681A.190, and chooses to secure its obligations incurred as a certified reinsurer in the form of a multi-beneficiary trust, the certified reinsurer shall maintain separate trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer with reduced security as permitted by this section or comparable laws of other jurisdictions in the United States and for its obligations subject to NRS 681A.180 and 681A.190. It is a condition of the grant of certification pursuant to sections 4 to 10, inclusive, of this act that the certified reinsurer shall have bound itself, by the language of the trust and agreement with the commissioner of insurance of the state with principal regulatory authority over each trust account, to fund, upon termination of any such trust account, out of the remaining surplus of such trust any deficiency of any other such trust account.

      3.  The minimum trusteed surplus requirements provided in NRS 681A.180 and 681A.190 are not applicable with respect to a multi-beneficiary trust maintained by a certified reinsurer for the purpose of securing obligations incurred pursuant to sections 4 to 10, inclusive, of this act, except that the trust shall maintain a minimum trusteed surplus of $10,000,000.

      4.  With respect to obligations incurred by a certified reinsurer pursuant to sections 4 to 10, inclusive, of this act, if the security is insufficient, the Commissioner shall reduce the allowable credit by an amount proportionate to the deficiency and may impose further reductions in allowable credit upon finding that there is a material risk that the certified reinsurer’s obligations will not be paid in full when due.

      5.  For the purposes of sections 4 to 10, inclusive, of this act, a certified reinsurer whose certification has been terminated for any reason shall be treated as a certified reinsurer required to secure 100 percent of its obligations.

      6.  If the Commissioner continues to assign a higher rating as permitted by other provisions of NRS 681A.150 to 681A.190, inclusive, and sections 4 to 10, inclusive, of this act, this requirement does not apply to a certified reinsurer in inactive status or to a reinsurer whose certification has been suspended.

 


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      7.  A certified reinsurer shall secure obligations assumed from ceding insurers in the United States under this section at a level consistent with the rating of the certified reinsurer, as specified in regulations adopted by the Commissioner.

      8.  As used in this section, “terminated” means the revocation, suspension, voluntary surrender or inactive status of a reinsurer’s certification.

      Sec. 9. If an applicant for certification has been certified as a reinsurer in a National Association of Insurance Commissioners accredited jurisdiction, the Commissioner has the discretion to defer to that jurisdiction’s certification, and has the discretion to defer to the rating assigned by that jurisdiction, and such assuming insurer shall be considered to be certified in this State.

      Sec. 10. A certified reinsurer that ceases to assume new business in this State may request to maintain its certification in inactive status to continue to qualify for a reduction in security for its in-force business. An inactive certified reinsurer must continue to comply with all applicable requirements of NRS 681A.150 to 681A.190, inclusive, and sections 4 to 10, inclusive, of this act, and the Commissioner shall assign a rating that takes into account, if relevant, the reasons why the reinsurer is not assuming new business.

      Sec. 11. Credit must be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of NRS 681A.150 to 681A.190, inclusive, and sections 4 to 10, inclusive, of this act, but only as to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law or regulation of that jurisdiction.

      Sec. 12. 1.  A ceding insurer shall take steps to manage its reinsurance recoverables proportionate to its own book of business. A domestic ceding insurer shall notify the Commissioner within 30 days after reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, exceeds 50 percent of the domestic ceding insurer’s last reported surplus to policyholders, or after it is determined that reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification must demonstrate that the exposure is safely managed by the domestic ceding insurer.

      2.  A ceding insurer shall take steps to diversify its reinsurance program. A domestic ceding insurer shall notify the Commissioner within 30 days after ceding to any single assuming insurer, or group of affiliated assuming insurers, more than 20 percent of the ceding insurer’s gross written premium in the preceding calendar year, or after it has determined that the reinsurance ceded to any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification must demonstrate that the exposure is safely managed by the domestic ceding insurer.

      Sec. 13. NRS 681A.130 is hereby amended to read as follows:

      681A.130  The Commissioner may adopt regulations to carry out the provisions of NRS 681A.110 to 681A.560, inclusive [.] , and sections 4 to 12, inclusive, of this act.

 


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      Sec. 14. NRS 681A.140 is hereby amended to read as follows:

      681A.140  As used in NRS 681A.140 to 681A.240, inclusive, and sections 4 to 12, inclusive, of this act, “qualified financial institution in the United States” means an institution that:

      1.  Is organized, or in the case of a branch or agency of a foreign banking organization in the United States licensed, under the laws of the United States or any state thereof and has been granted authority to operate with fiduciary powers;

      2.  Is regulated, supervised and examined by federal or state authorities having regulatory authority over banks and trust companies;

      3.  Is determined:

      (a) By the Commissioner to meet the standards of financial condition and standing prescribed by the Commissioner; or

      (b) By the National Association of Insurance Commissioners to meet the standards of financial condition and standing prescribed by the National Association of Insurance Commissioners; and

      4.  Is determined by the Commissioner to be otherwise acceptable.

      Sec. 15. NRS 681A.150 is hereby amended to read as follows:

      681A.150  No credit may be taken as an asset or as a deduction from liability on account of reinsurance unless the reinsurer is authorized to transact insurance or reinsurance in this state or the requirements of NRS 681A.160 [, 681A.170, 681A.180 or] to 681A.190, inclusive, and sections 4 to 10, inclusive, of this act, and in any of these cases the requirements of NRS 681A.200 and 681A.210 also are met.

      Sec. 16. NRS 681A.160 is hereby amended to read as follows:

      681A.160  1.  Except as otherwise provided in subsection 2, credit must be allowed if reinsurance is ceded to an assuming insurer which is accredited as a reinsurer in this state. An accredited reinsurer is one which [:] satisfies all of the following conditions:

      (a) Files with the Commissioner [an] a properly executed [form approved by the Commissioner] Form AR-1, provided on the Internet website of the Division, as evidence of its submission to this state’s jurisdiction . [;]

      (b) Submits to this state’s authority to examine its books and records . [;]

      (c) Files with the Commissioner a certified copy of a certificate of authority or other evidence approved by the Commissioner indicating that it is licensed to transact insurance or reinsurance in at least one state, or in the case of a branch in the United States of an alien assuming insurer is entered through and licensed to transact insurance or reinsurance in at least one state . [;]

      (d) Files annually with the Commissioner a copy of its annual statement filed with the Division of its state of domicile or entry and a copy of its most recent audited financial statement . [;]

      (e) [Maintains] Demonstrates to the satisfaction of the Commissioner that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. An assuming insurer is deemed to meet this requirement as of the time of its application if it maintains a surplus as regards policyholders in an amount which is:

             (1) Not less than $20,000,000 and whose accreditation has not been denied by the Commissioner within 90 days after its submission; or

 


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             (2) Less than $20,000,000 and whose accreditation has been approved by the Commissioner . [; and]

      (f) Pays all applicable fees, including, without limitation, all applicable fees required pursuant to NRS 680C.110.

      2.  [No credit may be allowed for a domestic ceding insurer if the assuming insurer’s accreditation has been revoked by the Commissioner after notice and a hearing.] If an accredited or certified reinsurer ceases to meet the requirements for accreditation or certification, the Commissioner may suspend or revoke the reinsurer’s accreditation or certification. Before suspending or revoking the reinsurer’s accreditation or certification, the Commissioner must give the reinsurer notice and opportunity for a hearing.

      3.  The suspension or revocation of an accreditation or certification may not take effect until after the Commissioner’s order on hearing unless:

      (a) The reinsurer waives its right to a hearing;

      (b) The Commissioner’s order is based upon regulatory action taken by the reinsurer’s domiciliary jurisdiction or the voluntary surrender or termination of the reinsurer’s eligibility to transact insurance or reinsurance business in its domiciliary jurisdiction or in the primary certifying state of the reinsurer; or

      (c) The Commissioner finds that an emergency requires immediate action and a court of competent jurisdiction has not stayed the Commissioner’s action.

      4.  During the period in which a reinsurer’s accreditation or certification is suspended, no reinsurance contract issued or renewed after the effective date of the suspension qualifies for credit except to the extent that the reinsurer’s obligations under the contract are secured pursuant to NRS 681A.240. If the reinsurer’s accreditation or certification is revoked, no credit for reinsurance may be granted after the effective date of the revocation except to the extent that the reinsurer’s obligations under the contract are secured pursuant to NRS 681A.240.

      Sec. 17. NRS 681A.170 is hereby amended to read as follows:

      681A.170  1.  Except as otherwise provided in subsection 2, credit must be allowed if reinsurance is ceded to an assuming insurer which is domiciled and licensed in, or in the case of a branch in the United States of an alien assuming insurer is entered through, a state which employs standards regarding credit for reinsurance substantially similar to those applicable under this chapter and the assuming insurer or branch in the United States of an alien assuming insurer:

      (a) Maintains a surplus as regards policyholders in an amount not less than $20,000,000; [and]

      (b) Submits to the authority of this state to examine its books and records [.] ; and

      (c) Files with the Commissioner a properly executed Form AR-1, provided on the Internet website of the Division, as evidence of its submission to this State’s jurisdiction.

      2.  The requirement of paragraph (a) of subsection 1 does not apply to reinsurance ceded and assumed pursuant to pooling among insurers affiliated with the same holding company.

 


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      Sec. 18. NRS 681A.180 is hereby amended to read as follows:

      681A.180  1.  Except as otherwise provided in subsection [4,] 5, credit must be allowed if reinsurance is ceded to an assuming insurer which maintains a trust fund in a qualified financial institution in the United States for the payment of the valid claims of its policyholders and ceding insurers in the United States, their assigns and successors in interest. The assuming insurer shall:

      (a) Report annually to the Commissioner information substantially the same as that required to be reported on the National Association of Insurance Commissioners’ form of annual statement by licensed insurers to enable the Commissioner to determine the sufficiency of the trust fund; and

      (b) Submit to the authority of the Commissioner to examine its books and records.

      2.  In the case of a single assuming insurer [, the] :

      (a) The trust must consist of an account in trust equal to the assuming insurer’s liabilities attributable to business written in the United States and the assuming insurer shall maintain a surplus in trust of not less than $20,000,000.

      (b) Three years after the assuming insurer has permanently discontinued underwriting new business secured by the trust, the commissioner of insurance of the state with principal regulatory authority over the trust may, at any time, authorize a reduction in the required trustee surplus, but only after finding, based on the assessment of the risk, that the new required surplus level is adequate for the protection of ceding insurers, policyholders and claimants in the United States in light of a reasonably adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and must consider all material risk factors, including, as applicable, the lines of business involved, the stability of the incurred loss estimates and the effect of the surplus requirements on the assuming insurer’s liquidity or solvency. The minimum required trustee surplus may not be reduced to an amount less than 30 percent of the assuming insurer’s liabilities attributable to reinsurance ceded by ceding insurers domiciled in the United States and covered by the trust.

      3.  In the case of a group of incorporated and individual unincorporated underwriters:

      (a) The trust must consist of an account in trust equal to the group’s liabilities attributable to business written in the United States.

      (b) The group shall:

             (1) Maintain a surplus in trust of which $100,000,000 must be held jointly for the benefit of ceding insurers in the United States to any member of the group; and

             (2) Make available to the Commissioner an annual certification of the solvency of each underwriter by the group’s domiciliary regulator and its independent public accountants.

      (c) The incorporated members of the group:

             (1) Shall not engage in any business other than underwriting as a member of the group; and

             (2) Must be subject to the same level of regulation and solvency control by the applicable regulatory agency of the state in which the group is domiciled as the individual unincorporated members of the group.

 


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      4.  Credit for reinsurance must not be granted unless the form of the trust and any amendments to the trust have been approved by the commissioner of insurance of the state in which the trust is domiciled or the commissioner of insurance of another state that, under the terms of the trust instrument, has accepted responsibility for regulatory authority over the trust. The form of the trust and any amendments to the trust must also be filed with each state in which the ceding insurer beneficiaries are domiciled or located. The trust instrument must provide that:

      (a) Contested claims become valid and enforceable from money held in the trust to the extent such claims remain unsatisfied within 30 days after the entry of the final order of any court of competent jurisdiction in the United States;

      (b) Legal title to the assets of the trust must be vested in the trustees for the benefit of the grantor’s ceding insurers in the United States, their assigns and successors in interest;

      (c) The trust is subject to examination as determined by the Commissioner;

      (d) The trust must remain in effect for as long as the assuming insurers or any member or former member of a group of insurers has outstanding obligations due under the agreements for reinsurance subject to the trust; and

      (e) Not later than February 28 of each year, the trustees of the trust shall report to the Commissioner in writing setting forth the balance of the trust and listing the trust’s investments at the end of the preceding year and shall certify the date of termination of the trust or certify that the trust will not expire before the next following December 31.

      5.  If the assuming insurer does not meet the requirements of NRS 681A.110, 681A.160 or 681A.170, credit must not be allowed unless the assuming insurer has agreed to the following conditions set forth in the trust agreement:

      (a) Notwithstanding any provision to the contrary in the trust instrument, if the trust fund consists of an amount that is less than the amount required pursuant to this section, or if the grantor of the trust fund is declared to be insolvent or placed into receivership, rehabilitation, liquidation or a similar proceeding in accordance with the laws of the grantor’s state or country of domicile, the trustee of the trust fund must comply with an order of the commissioner of insurance or other appropriate person with regulatory authority over the trust fund in that state or country or a court of competent jurisdiction requiring the trustee to transfer to that commissioner or person all the assets of the trust fund;

      (b) The assets of the trust fund must be distributed by and claims filed with and valued by the commissioner of insurance or other appropriate person with regulatory authority over the trust fund in accordance with the laws of the state in which the trust fund is domiciled that are applicable to the liquidation of domestic insurers in that state;

      (c) If the commissioner of insurance or other appropriate person with regulatory authority over the trust fund determines that the assets of the trust fund or any portion of the trust fund are not required to satisfy any claim of any ceding insurer of the grantor of the trust fund in the United States, the assets must be returned by that commissioner or person to the trustee of the trust fund for distribution in accordance with the trust agreement; and

 


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      (d) The grantor of the trust must waive any right that:

             (1) Is otherwise available to the grantor under the laws of the United States; and

             (2) Is inconsistent with the provisions of this subsection.

      Sec. 19. NRS 681A.210 is hereby amended to read as follows:

      681A.210  1.  Except as otherwise provided in subsection 2, if the assuming insurer is not licensed or accredited to transact insurance or reinsurance in this State, the credit permitted by NRS 681A.170 or 681A.180 must not be allowed unless the assuming insurer agrees in the agreements for reinsurance:

      (a) That in the event of the failure of the assuming insurer to perform its obligations under the terms of the agreement, the assuming insurer, at the request of the ceding insurer, will submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, will comply with all requirements necessary to give the court jurisdiction, and will abide by the final decision of the court or of any appellate court in the event of an appeal;

      (b) To designate the Commissioner or a designated attorney as its true and lawful attorney upon whom may be served any lawful process in an action, suit or proceeding instituted by or on behalf of the ceding company; and

      (c) To comply with the conditions set forth in subsection [4] 5 of NRS 681A.180.

      2.  This section does not conflict with or override the obligation of the parties to an agreement for reinsurance to arbitrate their disputes if such an obligation is created in the agreement.

      Sec. 20. NRS 681A.220 is hereby amended to read as follows:

      681A.220  Credit must be allowed if reinsurance is ceded to an assuming insurer not meeting the requirements of NRS 681A.110 [,] and 681A.150 [, 681A.160, 681A.170, 681A.180 or] to 681A.190, inclusive, and sections 4 to 10, inclusive, of this act, but only with respect to the insurance of risks located in jurisdictions where such reinsurance is required by applicable law or regulation of that jurisdiction.

      Sec. 21. NRS 681A.230 is hereby amended to read as follows:

      681A.230  1.  Credit must be allowed as an asset or as a deduction from liability to any ceding insurer for reinsurance lawfully ceded to an assuming insurer qualified therefor pursuant to NRS 681A.110 [,] and 681A.150 [, 681A.160, 681A.170, 681A.180 or] to 681A.190, inclusive, and sections 4 to 10, inclusive, of this act, but no such credit may be allowed unless the contract for reinsurance provides in substance that, in the event of the insolvency of the ceding insurer, the reinsurance is payable pursuant to a contract reinsured by the assuming insurer on the basis of reported claims allowed in any liquidation proceedings, subject to court approval, without diminution because of the insolvency of the ceding insurer. Except as otherwise provided in NRS 686C.223, those payments must be made directly to the ceding insurer or to its domiciliary liquidator unless:

      (a) The contract of reinsurance or other written contract specifically designates another payee of the payments in the event of the insolvency of the ceding insurer; or

      (b) The assuming insurer, with the consent of the persons directly insured, has assumed the obligations from the policies issued by the ceding insurer as direct obligations of the assuming insurer, and in substitution for the obligations of the ceding insurer, to the payees under those policies.

 


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insurer as direct obligations of the assuming insurer, and in substitution for the obligations of the ceding insurer, to the payees under those policies.

      2.  The domiciliary liquidator of an insolvent ceding insurer shall give written notice to the assuming insurer of the pendency of any claim against the ceding insurer on any contract reinsured within a reasonable time after such a claim is filed in the liquidation proceeding. During the pendency of the claim, the assuming insurer may investigate the claim and, at its own expense, interpose in the proceeding in which the claim is to be adjudicated any defense that the assuming insurer deems available to the ceding insurer or its liquidator.

      Sec. 22. Chapter 681B of NRS is hereby amended by adding thereto the provisions set forth as sections 23 to 39.5, inclusive, of this act.

      Sec. 23. As used in this chapter, unless the context otherwise requires, the words and terms defined in sections 24 to 32, inclusive, of this act have the meanings ascribed to them in those sections.

      Sec. 24. “Accident and health insurance” means a contract that incorporates morbidity risk and provides protection against economic loss resulting from accident, sickness or medical conditions, and as may further be specified in the Valuation Manual.

      Sec. 25. “Applicable company” means an insurer that:

      1.  Has written, issued or reinsured life insurance, accident and health insurance or deposit-type contracts in this State and has at least one such policy in force or on claim; or

      2.  Has written, issued or reinsured life insurance, accident and health insurance or deposit-type contracts in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance or deposit-type contracts in this State.

      Sec. 26. “Appointed actuary” means a qualified actuary who is appointed in accordance with the Valuation Manual to prepare the actuarial opinion required by section 33.5 of this act.

      Sec. 27. “Confidential information” means any information which qualifies as confidential under section 33 of this act.

      Sec. 28. “Deposit-type contract” means a contract that does not incorporate mortality or morbidity risks, and as may further be specified in the Valuation Manual.

      Sec. 28.3. “Life insurance” means a contract that incorporates mortality risk, including, without limitation, an annuity and pure endowment contract, and as may further be specified in the Valuation Manual.

      Sec. 28.5. “NAIC” means the National Association of Insurance Commissioners or its successor organization.

      Sec. 28.7. “Operative date of the Valuation Manual” means the date determined pursuant to subsection 2 of section 33.7 of this act.

      Sec. 29. “Policyholder behavior” includes any action a policyholder, contract holder or any other person with the right to elect options, such as a certificate holder, may take pursuant to a policy or contract subject to this chapter, including, without limitation, lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization or benefit elections prescribed by the policy or contract. The term does not include events of mortality or morbidity that result in benefits prescribed in their essential aspects by the terms of the policy or contract.

 


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      Sec. 30. “Principle-based valuation” means a reserve valuation that uses one or more methods or one or more assumptions determined by the insurer and is required to comply with sections 34, 35 and 36 of this act, and as may further be specified in the Valuation Manual.

      Sec. 30.5. “Qualified actuary” means a natural person who:

      1.  Is qualified to sign the applicable statement of actuarial opinion in accordance with the standards that are established by the American Academy of Actuaries, or its successor organization, to determine the qualification of an actuary to sign such a statement; and

      2.  Meets the applicable requirements set forth in the Valuation Manual.

      Sec. 31. “Tail risk” means a risk that occurs either where the frequency of low probability events is higher than expected under a normal probability distribution or where there are observed events of very significant size or magnitude.

      Sec. 32. “Valuation Manual” means the Valuation Manual adopted by the National Association of Insurance Commissioners on December 2, 2012, and as subsequently amended by the NAIC.

      Sec. 33. 1.  The following types of information shall qualify as confidential information:

      (a) A memorandum in support of an opinion submitted pursuant to NRS 681B.200 to 681B.260, inclusive, or section 33.5 of this act and any other documents, materials and other information, including, without limitation, all working papers, and copies thereof, created, produced or obtained by or disclosed to the Commissioner or any other person in connection with such memorandum;

      (b) All documents, materials and other information, including, without limitation, all working papers, and copies thereof, created, produced or obtained by or disclosed to the Commissioner or any other person in the course of an examination authorized by subsection 2 of NRS 679B.230 or subsection 7 of section 33.7 of this act, provided that if an examination report or other material prepared in connection with an examination authorized by NRS 679B.230 to 679B.300, inclusive, is not held as private and confidential information in accordance with the provisions of NRS 679B.230 to 679B.300, inclusive, an adopted examination report created in accordance with the provisions of subsection 2 of NRS 679B.230 or subsection 7 of section 33.7 of this act shall not be deemed confidential information;

      (c) Any reports, documents, materials and other information developed by an applicable company in support of, or in connection with, an annual certification by the applicable company in accordance with the provisions of paragraph (b) of subsection 1 of section 35 of this act evaluating the effectiveness of the company’s internal controls with respect to a principle-based valuation, and any other documents, materials and other information, including, without limitation, all working papers, and copies thereof, created, produced or obtained by or disclosed to the Commissioner or any other person in connection with such reports, documents, materials and other information;

      (d) Any principle-based valuation report developed in accordance with paragraph (c) of subsection 1 of section 35 of this act, and any other documents, materials and other information, including, without limitation, all working papers, and copies thereof, created, produced or obtained by or disclosed to the Commissioner or any other person in connection with such report; and

 


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all working papers, and copies thereof, created, produced or obtained by or disclosed to the Commissioner or any other person in connection with such report; and

      (e) Any experience data and experience materials, and any other documents, materials, data and other information, including, without limitation, all working papers, and copies thereof, created, produced or obtained by or disclosed to the Commissioner or any other person in connection with such data and materials.

      2.  As used in this section:

      (a) “Experience data” means all documents, materials, data and other information submitted by an applicable company to the Commissioner, a designated experience reporting agent or other such person authorized to act on behalf of the Commissioner pursuant to sections 37 and 37.5 of this act.

      (b) “Experience materials” means all documents, materials, data and other information, including, without limitation, all working papers, and copies thereof, created or produced in connection with experience data including, without limitation, any potentially company-identifying or personally identifiable information, that is provided to or obtained by the Commissioner, a designated experience reporting agent or other such person authorized to act on behalf of the Commissioner pursuant to sections 37 and 37.5 of this act.

      Sec. 33.3. 1.  For policies and contracts issued on or after the operative date of the Valuation Manual:

      (a) The Commissioner shall annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance contracts, annuity and pure endowment contracts, accident and health contracts, and deposit-type contracts of every applicable company doing business in this State.

      (b) In lieu of the valuation of the reserves required of a foreign or alien applicable company, the Commissioner may accept a valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in sections 23 to 39.5, inclusive, of this act, and NRS 681B.110 to 681B.150, inclusive, and 681B.200 to 681B.270, inclusive.

      2.  The provisions set forth in sections 33.7 to 36, inclusive, of this act apply to all policies and contracts issued on or after the operative date of the Valuation Manual.

      3.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only to, or in connection with, policies and contracts issued on or after the operative date of the Valuation Manual.

      Sec. 33.5. 1.  For actuarial opinions of reserves prepared after the operative date of the Valuation Manual:

      (a) Every company with outstanding life insurance contracts, accident and health insurance contracts or deposit-type contracts in this State and subject to regulation by the Commissioner shall annually submit the opinion of the appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts and comply with applicable laws of this State. The Valuation Manual will prescribe the specifics of this opinion including any items deemed to be necessary to its scope.

 


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      (b) Every applicable company with outstanding life insurance contracts, accident and health insurance contracts or deposit-type contracts in this State and subject to regulation by the Commissioner, except as exempted in the Valuation Manual, must also annually include in the opinion required by paragraph (a), an opinion of the same appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified in the Valuation Manual, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including, but not limited to, the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company’s obligations under the policies and contracts, including, but not limited to, the benefits under and expenses associated with the policies and contracts.

      (c) Each opinion required by paragraphs (a) and (b) must be governed by the following provisions:

             (1) A memorandum, in the form and substance as specified in the Valuation Manual, and acceptable to the Commissioner, must be prepared to support each actuarial opinion.

             (2) If the insurance company fails to provide a supporting memorandum at the request of the Commissioner within a period specified in the Valuation Manual or the Commissioner determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the Valuation Manual or is otherwise unacceptable to the Commissioner, the Commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the Commissioner.

      (d) In addition to the requirements of paragraph (c), each opinion required by paragraphs (a) and (b) must be governed by the following provisions:

             (1) The opinion must be in the form and substance as specified in the Valuation Manual and acceptable to the Commissioner.

             (2) The opinion must be submitted with the annual statement reflecting the valuation of the reserve liabilities for each year ending on or after the operative date of the Valuation Manual.

             (3) The opinion must apply to all policies and contracts subject to paragraph (b) plus other actuarial liabilities as may be specified in the Valuation Manual.

             (4) The opinion must be based on standards adopted from time to time by the Actuarial Standards Board, or its successor organization, and on such additional standards as may be prescribed in the Valuation Manual.

             (5) In the case of an opinion required to be submitted by a foreign or alien applicable company, the Commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the Commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this State.

             (6) Except in cases of fraud or willful misconduct, the appointed actuary is not liable for damages to any person, other than the insurance company and the Commissioner, for any act, error, omission, decision or conduct with respect to the appointed actuary’s opinion.

 


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             (7) Disciplinary action by the Commissioner against the company or the appointed actuary must be defined in regulations by the Commissioner.

      2.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only on or after the operative date of the Valuation Manual.

      Sec. 33.7. 1.  For policies issued on or after the operative date of the Valuation Manual, the standard prescribed in the Valuation Manual is the minimum standard of valuation required under section 33.3 of this act, except as otherwise provided in subsection 6 or 8.

      2.  The operative date of the Valuation Manual is January 1 of the first calendar year following the first July 1 as of which all of the following have occurred:

      (a) The Valuation Manual has been adopted by the NAIC by an affirmative vote of at least 42 members, or three-fourths of the members voting, whichever is greater.

      (b) The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by states representing greater than 75 percent of the direct premiums written as reported in the following annual statements submitted for 2008:

             (1) Life, accident and health annual statements;

             (2) Health annual statements; or

             (3) Fraternal annual statements.

      (c) The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by at least 42 of the following 55 jurisdictions:

             (1) The 50 states of the United States;

             (2) American Samoa;

             (3) The American Virgin Islands;

             (4) The District of Columbia;

             (5) Guam; and

             (6) Puerto Rico.

      (d) The Valuation Manual is adopted in accordance with regulations adopted by the Commissioner.

      3.  Within 90 days after all the events described in paragraphs (a) to (d), inclusive, of subsection 2 have taken place, the Commissioner shall issue a bulletin to inform insurers and the public of that fact.

      4.  Unless a change in the Valuation Manual specifies a later effective date, changes to the Valuation Manual are effective on January 1 following the date when the change to the Valuation Manual is adopted by the NAIC by an affirmative vote representing:

      (a) At least three-fourths of the members of the NAIC voting, but not less than a majority of the total membership; and

      (b) Members of the NAIC representing jurisdictions totaling greater than 75 percent of the direct premiums written as reported in the following annual statements most recently available before the vote in subparagraph (1):

             (1) Life, accident and health annual statements;

             (2) Health annual statements; or

             (3) Fraternal annual statements.

      5.  The Valuation Manual must specify all of the following:

 


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      (a) Minimum valuation standards for and definitions of the policies or contracts subject to section 33.3 of this act, including:

             (1) The Commissioner’s reserve valuation method for life insurance contracts, other than annuity contracts, subject to section 33.3 of this act;

             (2) The Commissioner’s annuity reserve valuation method for annuity contracts subject to section 33.3 of this act; and

             (3) Minimum reserves for all other policies or contracts subject to section 33.3 of this act;

      (b) Which policies or contracts or types of policies or contracts that are subject to the requirements of a principle-based valuation in section 34 of this act and the minimum valuation standards consistent with those requirements;

      (c) For policies and contracts subject to a principle-based valuation under sections 34, 35 and 36 of this act:

             (1) Requirements for the format of the reports provided to the Commissioner pursuant to paragraph (c) of subsection 1 of section 35 of this act and which must include information necessary to determine if the valuation is appropriate and in compliance with sections 23 to 39.5, inclusive, of this act, and NRS 681B.110 to 681B.150, inclusive, and 681B.200 to 681B.270, inclusive;

             (2) Assumptions must be prescribed for risks over which the company does not have significant control or influence; and

             (3) Procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or modification of such procedures;

      (d) For policies not subject to a principle-based valuation under sections 34, 35 and 36 of this act, the minimum valuation standard must:

             (1) Be consistent with the minimum standard of valuation before the operative date of the Valuation Manual; or

             (2) Develop reserves that quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions which include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts;

      (e) Other requirements, including, but not limited to, those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules and internal controls; and

      (f) The data and form of the data required pursuant to section 37 of this act, with whom the data must be submitted, and may specify other requirements including data analyses and reporting of such analyses.

      6.  In the absence of a specific valuation requirement or if a specific valuation requirement in the Valuation Manual is not, in the opinion of the Commissioner, in compliance with sections 23 to 39.5, inclusive, of this act, and NRS 681B.110 to 681B.150, inclusive, and 681B.200 to 681B.270, inclusive, the company must, with respect to such requirements, comply with minimum valuation standards prescribed by the Commissioner by regulation.

      7.  The Commissioner may engage a qualified actuary, at the expense of the company, to perform an actuarial examination of the company and opine on the appropriateness of any reserve assumption or method used by the company, or to review and opine on a company’s compliance with any requirement set forth in sections 23 to 39.5, inclusive, of this act, and NRS 681B.110 to 681B.150, inclusive, and 681B.200 to 681B.270, inclusive.

 


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opine on the appropriateness of any reserve assumption or method used by the company, or to review and opine on a company’s compliance with any requirement set forth in sections 23 to 39.5, inclusive, of this act, and NRS 681B.110 to 681B.150, inclusive, and 681B.200 to 681B.270, inclusive. The Commissioner may rely upon the opinion, regarding provisions contained within sections 23 to 39.5, inclusive, of this act, and NRS 681B.110 to 681B.150, inclusive, and 681B.200 to 681B.270, inclusive, of a qualified actuary engaged by the Commissioner of another state, district or territory of the United States. As used in this subsection, “engage” includes employment and contracting.

      8.  The Commissioner may require a company to change any assumption or method that, in the opinion of the Commissioner, is necessary in order to comply with the requirements of the Valuation Manual or sections 23 to 39.5, inclusive, of this act, and NRS 681B.110 to 681B.150, inclusive, and 681B.200 to 681B.270, inclusive, and the company shall adjust the reserves as required by the Commissioner. The Commissioner may take other disciplinary action as allowed pursuant to regulations adopted by the Commissioner.

      9.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only to, or in connection with, policies and contracts issued on or after the operative date of the Valuation Manual.

      Sec. 33.9. 1.  For accident and health insurance policies and contracts issued on or after the operative date of the Valuation Manual, the standard prescribed in the Valuation Manual is the minimum standard of valuation required under section 33.3 of this act.

      2.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only to, or in connection with, policies and contracts issued on or after the operative date of the Valuation Manual.

      Sec. 34. 1.  An applicable company using a principle-based valuation must establish reserves that:

      (a) Quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions which include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts. For policies or contracts with significant tail risk, the valuation must reflect conditions appropriately adverse to quantify the tail risk.

      (b) Incorporate assumptions, risk analysis methods and financial models and management techniques that are consistent with, but not necessarily identical to, those utilized within the company’s overall risk assessment process while recognizing potential differences in financial reporting structures and any prescribed assumptions or methods.

      (c) Incorporate assumptions that are:

             (1) Prescribed in the Valuation Manual; or

             (2) Established utilizing the company’s available experience, to the extent that it is relevant and statistically credible or established utilizing other relevant, statistically credible experience.

      (d) Provide margins for uncertainty, including adverse deviation and estimation error, such that the greater the uncertainty the larger the margin and resulting reserve.

      2.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only on or after the operative date of the Valuation Manual.

 


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      Sec. 35. 1.  An applicable company using a principle-based valuation for one or more policies or contracts subject to this chapter, and as specified in the Valuation Manual, shall:

      (a) Establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the Valuation Manual.

      (b) Provide to the Commissioner, and the company’s board of directors, an annual certification of the effectiveness of the internal controls with respect to the principle-based valuation. Such controls must be designed to ensure that all material risks inherent in the liabilities and associated assets subject to such valuation are included in the valuation, and that valuations are made pursuant to the Valuation Manual. The certification must be based on the controls in place as of the end of the preceding calendar year.

      (c) Develop and, upon request, provide to the Commissioner a principle-based valuation report that complies with the standards prescribed in the Valuation Manual.

      2.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only on or after the operative date of the Valuation Manual.

      Sec. 36. 1.  A principle-based valuation may include a prescribed formulaic reserve component.

      2.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only to, or in connection with, policies and contracts issued on or after the operative date of the Valuation Manual.

      Sec. 37. 1.  An applicable company shall submit to the Commissioner, to an appropriately appointed experience reporting agent or to such other person authorized to act on behalf of the Commissioner pursuant to section 37.5 of this act, and as specified in the Valuation Manual, mortality, morbidity, policyholder behavior or expense experience and other data as prescribed in the Valuation Manual.

      2.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only on or after the operative date of the Valuation Manual.

      Sec. 37.5. 1.  The Commissioner may designate a person to act as the experience reporting agent of the Commissioner and to assist the Commissioner in compiling relevant mortality, morbidity, policyholder behavior or expense experience and other data pursuant to section 37 of this act and as prescribed in the Valuation Manual.

      2.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only on or after the operative date of the Valuation Manual.

      Sec. 38. 1.  Except as otherwise provided in this section and NRS 239.0115 and sections 33 and 39 of this act, an applicable company’s confidential information is confidential by law and privileged, and is not:

      (a) Subject to subpoena or other forms of civil discovery; or

      (b) Admissible in evidence in any private civil action.

      2.  Neither the Commissioner nor any person who received confidential information while acting under the authority of the Commissioner may be permitted or required to testify in any private civil action concerning the confidential information.

 


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      3.  To assist in the performance of the Commissioner’s duties, the Commissioner may share confidential information with other state, federal and international regulatory agencies and the NAIC, provided that the recipient agrees, and has the legal authority to agree, to maintain the confidentiality and privileged status of such confidential information in the same manner and to the same extent as required of the Commissioner.

      4.  To assist in the performance of the Commissioner’s duties, the Commissioner may share confidential information specified in paragraphs (a) and (d) of subsection 1 of section 33 of this act with state, federal and international law enforcement officials or the Actuarial Board for Counseling and Discipline, or its successor, if the confidential information is provided for the purpose of professional disciplinary hearings and the recipient agrees, and has the legal authority to agree, to maintain the confidentiality and privileged status of such confidential information in the same manner and to the same extent as required of the Commissioner.

      5.  The Commissioner may receive documents, materials, data and other information, including, without limitation, confidential information and privileged documents, materials, data or other information from the NAIC, and its affiliates and subsidiaries, from regulatory or law enforcement officials of other foreign or domestic jurisdictions and from the Actuarial Board for Counseling and Discipline, or its successor, and shall maintain as confidential or privileged any document, material, data or other information received with notice, or the understanding, that the information is confidential or privileged under the laws of the jurisdiction which is the source of the document, material, data or other information.

      6.  The Commissioner may enter into agreements governing the sharing and use of confidential information consistent with this section.

      7.  No waiver of any applicable privilege or claim of confidentiality in confidential information shall occur as a result of the disclosure of the confidential information to the Commissioner pursuant to this section or as a result of sharing as authorized in subsections 3 and 4.

      8.  A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this section may be available and enforced in any proceeding in, and in any court of, this State.

      9.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only on or after the operative date of the Valuation Manual.

      Sec. 39. 1.  Notwithstanding any provisions of section 38 of this act to the contrary, any confidential information specified in subsections 1 and 5 of section 38 of this act:

      (a) May be subject to subpoena for the purpose of defending an action seeking damages from the appointed actuary submitting the related memorandum in support of an opinion submitted in accordance with the provisions of NRS 681B.200 to 681B.260, inclusive, or a principle-based valuation report developed in accordance with paragraph (c) of subsection 1 of section 35 of this act by reason of an action required by sections 33 to 39.5, inclusive, of this act or any regulations adopted pursuant thereto;

      (b) May otherwise be released by the Commissioner with the written consent of the applicable company; and

      (c) Is no longer confidential if any portion of a memorandum in support of an opinion submitted in accordance with the provisions of NRS 681B.200 to 681B.260, inclusive, or a principle-based valuation report developed in accordance with paragraph (c) of subsection 1 of section 35 of this act, is:

 


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NRS 681B.200 to 681B.260, inclusive, or a principle-based valuation report developed in accordance with paragraph (c) of subsection 1 of section 35 of this act, is:

             (1) Cited by the applicable company in its marketing;

             (2) Publicly volunteered to or before a government agency other than the Division or an insurance department of another state; or

             (3) Released by the applicable company to the news media.

      2.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only on or after the operative date of the Valuation Manual.

      Sec. 39.5. 1.  The Commissioner may exempt specific product forms or product lines of a domestic company that is licensed and doing business only in this State from the requirements of section 33.7 of this act, if:

      (a) The Commissioner has issued to the company a written exemption and has not subsequently revoked that written exemption; and

      (b) The company computes reserves using assumptions and methods that were used before the operative date of the Valuation Manual, in addition to complying with any applicable requirements established in regulations adopted by the Commissioner.

      2.  If a company is granted an exemption as described in subsection 1, the provisions of NRS 681B.110 to 681B.150, inclusive, and 681B.200 to 681B.270, inclusive, apply to that company.

      3.  The provisions of this section apply only on or after the operative date of the Valuation Manual.

      Sec. 40. NRS 681B.020 is hereby amended to read as follows:

      681B.020  1.  In addition to assets impliedly excluded by the provisions of NRS 681B.010, the following expressly may not be allowed as assets in any determination of the financial condition of an insurer:

      (a) Goodwill, trade names and other like intangible assets.

      (b) Advances to officers, other than policy loans, whether secured or not, and advances to employees, agents and other persons on personal security only.

      (c) Stock of such insurer, owned by it, or any equity therein or loans secured thereby, or any proportionate interest in such stock acquired or held through the ownership by such insurer of an interest in another firm, corporation or business unit.

      (d) Furniture, fixtures, furnishings, safes, vehicles, libraries, stationery, literature and supplies, other than data processing, recordkeeping and accounting systems authorized under subsection 13 of NRS 681B.010, except [:

             (1) In the case of title insurers such materials and plants as the insurer is expressly authorized to invest in under NRS 682A.220; and

             (2) In the case of any insurer,] such personal property as the insurer is permitted to hold pursuant to chapter 682A of NRS, or which is reasonably necessary for the maintenance and operation of real property lawfully acquired and held by the insurer other than real property used by it for home office, branch office and similar purposes.

      (e) The amount, if any, by which the aggregate book value of investments as carried in the ledger assets of the insurer exceeds the aggregate value thereof as determined under this Code.

      2.  If any successor organization to the State Industrial Insurance System that was established by section 79 of chapter 642, Statutes of Nevada 1981, at page 1449, wishes to transact in this state property or casualty insurance other than industrial insurance, the money required to be held in trust by that organization pursuant to NRS 616B.042 may not be allowed as assets of the successor organization in determining its financial condition to transact such insurance.

 


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1981, at page 1449, wishes to transact in this state property or casualty insurance other than industrial insurance, the money required to be held in trust by that organization pursuant to NRS 616B.042 may not be allowed as assets of the successor organization in determining its financial condition to transact such insurance.

      Sec. 40.15. NRS 681B.110 is hereby amended to read as follows:

      681B.110  1.  The Commissioner shall, in the manner provided by NRS 681B.110 to 681B.150, inclusive, annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance policies and annuity and pure endowment contracts of every life insurer doing business in this state, issued on or after January 1, 1972, and before the operative date of the Valuation Manual, except that in the case of an alien insurer, the valuation must be limited to its United States business.

      2.  [The Commissioner may certify the amount of any such reserves, specifying the mortality table or tables, rate or rates of interest and methods used in the calculation of the reserves.

      3.]  The Commissioner may:

      (a) Use any method, including group methods and the net level premium method, in the calculation of the reserves.

      (b) Use approximate averages for fractions of a year or other period to calculate the reserves.

      (c) In lieu of the valuation of the reserves required of any foreign or alien company, accept any valuation made, or caused to be made, by an insurance supervisory officer of any other state or jurisdiction if the valuation by the insurance supervisory officer complies with the minimum standard required by NRS 681B.110 to 681B.150, inclusive . [, and if the insurance officer of the other state or jurisdiction accepts as sufficient and valid for all legal purposes the certificate of valuation of the Commissioner when the certificate states the valuation to have been made in a specified manner according to which the aggregate reserves would be at least as large as if they had been computed in the manner prescribed by the law of that state or jurisdiction.

      4.  Any such insurer which at any time has adopted any standard of valuation producing greater aggregate reserves than those calculated according to the minimum standard provided in NRS 681B.110 to 681B.150, inclusive, may, with the approval of the Commissioner, adopt any lower standard of valuation, but not lower than the minimum provided in those sections.]

      3.  The provisions set forth in NRS 681B.110 to 681B.150, inclusive, and 681B.270 apply to all policies and contracts, as appropriate, issued on or after January 1, 1972, and before the operative date of the Valuation Manual. The provisions set forth in sections 33.7 to 36, inclusive, of this act do not apply to any such policies and contracts.

      4.  The minimum standard for the valuation of policies and contracts issued before January 1, 1972, must be that provided by the laws in effect immediately preceding that date.

      5.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only to, or in connection with, policies and contracts issued on or after January 1, 1972, and before the operative date of the Valuation Manual.

 


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      Sec. 40.2. NRS 681B.120 is hereby amended to read as follows:

      681B.120  1.  Except as otherwise provided in subsection 3 and in NRS 681B.125, the minimum standards for the valuation of all policies and contracts issued before January 1, 1972, are as follows:

      (a) The legal minimum standard for valuation of contracts issued before January 1, 1942, is a basis not lower than that used for the annual statement of the year during which the policies were issued, and for contracts issued on and after January 1, 1942, is the American Experience Table of Mortality with either Craig’s or Buttolph’s Extension for ages under 10, with interest at not more than 3.5 percent per annum. Annuities and pure endowments purchased under group annuity and pure endowment contracts must be valued in the same manner, with interest at not more than 5 percent. Such policies may provide for not more than 1-year preliminary term insurance by incorporating therein a clause plainly showing that the first year’s insurance under the contract is term insurance purchased by the whole or part of the premiums to be received during the first year of the contract.

      (b) The legal minimum standard for the valuation of group life insurance policies under which the premium rates are not guaranteed for more than 5 years is the American Men Ultimate Table of Mortality with interest at not more than 3.5 percent per annum.

      (c) The legal minimum standard for the valuation of industrial policies is the American Experience Table of Mortality or the Standard Industrial Mortality Table or the Substandard Industrial Mortality Table with interest at not more than 3.5 percent per annum by the net level premium method, or in accordance with their terms by the modified preliminary term method described in this section.

      (d) Reserves for all such policies and contracts may be calculated, at the option of the insurer, according to any standards which produce greater aggregate reserves than the minimum reserves required by this subsection.

      2.  Except as otherwise provided in subsection 3 and in NRS 681B.125, the minimum standards for the valuation of all policies and contracts issued on or after January 1, 1972, are the Commissioners reserve valuation methods defined in NRS 681B.130 and 681B.150, 5 percent interest for group annuity and pure endowment contracts and 3.5 percent interest for all other such policies and contracts or, in the case of policies and contracts other than annuity and pure endowment contracts issued on or after July 1, 1973, 4 percent interest for such policies issued before July 1, 1977, 5.5 percent interest for single premium life insurance policies and 4.5 percent for all other such policies issued on and after July 1, 1977, and the following tables:

      (a) For all ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in such policies, the Commissioners 1941 Standard Ordinary Mortality Table until the operative date of NRS 688A.340, and, for all such policies issued on and after the operative date of NRS 688A.340 and before the operative date of NRS 688A.325, the Commissioners 1958 Standard Ordinary Mortality Table, except that for any category of such policies issued on female risks all modified net premiums and present values referred to in NRS 681B.110 to 681B.150, inclusive, may be calculated according to an age not more than 6 years younger than the actual age of the insured. For policies issued on or after the operative date of NRS 688A.325:

 


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             (1) The Commissioners 1980 Standard Ordinary Mortality Table;

             (2) At the election of the insurer for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors; or

             (3) Any ordinary mortality table which is adopted after 1980 by the [National Association of Insurance Commissioners] NAIC and is approved by a regulation adopted by the Commissioner,

Ê may be used in determining the minimum standard of valuation for such policies.

      (b) For all industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in such policies, the 1941 Standard Industrial Mortality Table for such policies issued before the operative date of NRS 688A.330, and for such policies issued on or after that date, the Commissioners 1961 Standard Industrial Mortality Table or any industrial mortality table which is adopted after 1980 by the [National Association of Insurance Commissioners] NAIC and is approved by a regulation adopted by the Commissioner for use in determining the minimum standard of valuation for such policies.

      (c) For individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the 1937 Standard Annuity Mortality Table, or, at the option of the insurer, the Annuity Mortality Table for 1949, Ultimate, or any modification of either of these tables approved by the Commissioner.

      (d) For group annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the Group Annuity Mortality Table for 1951, any modification of that table approved by the Commissioner, or, at the option of the insurer, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts.

      (e) For total and permanent disability benefits in or supplementary to ordinary policies or contracts, for policies or contracts issued on or after January 1, 1966, the tables of Period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries, with due regard to the type of benefit, or any tables of disablement rates and termination rates which are adopted after 1980 by the [National Association of Insurance Commissioners] NAIC and are approved by a regulation adopted by the Commissioner for use in determining the minimum standard of valuation for such policies; and for policies or contracts issued on or after January 1, 1961, and before January 1, 1966, either such tables or, at the option of the insurer, the Class (3) Disability Table (1926).

      (f) Benefits for accidental death in or supplementary to policies, for policies issued on or after January 1, 1966, the 1959 Accidental Death Benefits Table, or any accidental death benefits table which is adopted after 1980 by the [National Association of Insurance Commissioners] NAIC and is approved by a regulation adopted by the Commissioner for use in determining the minimum standard of valuation for such policies; and for policies issued on or after January 1, 1961, and before January 1, 1966, either such table or, at the option of the insurer, the Inter-Company Double Indemnity Mortality Table. Either table must be combined with a mortality table permitted for calculating the reserves for life insurance policies.

 


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      (g) For group life insurance, for life insurance issued on the substandard basis and for special benefits, such tables as may be approved by the Commissioner.

      3.  Except as provided in NRS 681B.125, the minimum standards for the valuation of all individual annuity and pure endowment contracts issued on or after the valuation operative date defined in subsection 4 and for all annuities and pure endowments purchased on or after that date, under group annuity and pure endowment contracts, are the Commissioners reserve valuation methods defined in NRS 681B.130 and the following tables and interest rates:

      (a) For individual annuity and pure endowment contracts issued before July 1, 1977, excluding any disability and accidental death benefits in such contracts, the 1971 Individual Annuity Mortality Table, or any modification of the table approved by the Commissioner, and 6 percent interest for single premium immediate annuity contracts, and 4 percent interest for all other individual annuity and pure endowment contracts.

      (b) For individual single premium immediate annuity contracts issued on or after July 1, 1977, excluding any disability and accidental death benefits in such contracts, the 1971 Individual Annuity Mortality Table, or any individual annuity mortality table which is adopted after 1980 by the [National Association of Insurance Commissioners] NAIC and is approved by a regulation adopted by the Commissioner for use in determining the minimum standard of valuation for such contracts, or any modification of those tables approved by the Commissioner, and 7.5 percent interest.

      (c) For individual annuity and pure endowment contracts issued on or after July 1, 1977, other than single premium immediate annuity contracts, excluding any disability and accidental death benefits in such contracts, the 1971 Individual Annuity Mortality Table or any individual annuity mortality table which is adopted after 1980 by the [National Association of Insurance Commissioners] NAIC and is approved by a regulation adopted by the Commissioner for use in determining the minimum standard of valuation for such contracts, or any modification of those tables approved by the Commissioner, and 5.5 percent interest for single premium deferred annuity and pure endowment contracts and 4.5 percent interest for all other such individual annuity and pure endowment contracts.

      (d) For all annuities and pure endowments purchased before July 1, 1977, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 Group Annuity Mortality Table, or any modification of that table approved by the Commissioner, and 6 percent interest.

      (e) For all annuities and pure endowments purchased on or after July 1, 1977, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 Group Annuity Mortality Table, or any group annuity mortality table which is adopted after 1980 by the [National Association of Insurance Commissioners] NAIC and is approved by a regulation adopted by the Commissioner for use in determining the minimum standard of valuation for such annuities and pure endowments, or any modification of those tables approved by the Commissioner, and 7.5 percent interest.

      4.  After July 1, 1973, any insurer may file with the Commissioner a written notice of its election to comply with the provisions of subsection 3 after a specified date before January 1, 1979, which then becomes the valuation operative date for the insurer, but an insurer may elect a different valuation operative date for individual annuity and pure endowment contracts from that elected for group annuity and pure endowment contracts.

 


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valuation operative date for the insurer, but an insurer may elect a different valuation operative date for individual annuity and pure endowment contracts from that elected for group annuity and pure endowment contracts. If an insurer makes no such election, the valuation operative date for the insurer is January 1, 1979.

      5.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only to, or in connection with, policies and contracts issued before the operative date of the Valuation Manual.

      Sec. 40.25. NRS 681B.125 is hereby amended to read as follows:

      681B.125  1.  This section sets forth the interest rates used in determining the minimum standard for valuation of:

      (a) All life insurance policies issued in a particular calendar year on or after the operative date of NRS 688A.325;

      (b) All individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1984;

      (c) All annuities and pure endowments purchased in a particular calendar year on or after January 1, 1984, under group annuity and pure endowment contracts; and

      (d) The net increase, if any, in a particular calendar year after January 1, 1984, in amounts held under contract which have guaranteed interest.

      2.  The interest rates for valuation must be determined as follows, and the results rounded to the nearer one-quarter of 1 percent:

      (a) For life insurance:

 

                   I = .03 + W (R1 - .03) + W/2 (R2 - .09)

 

      (b) For single-premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with options for cash settlement and from contracts which have guaranteed interest with options for cash settlement:

 

                   I = .03 + W (R - .03)

 

where

                   R1 is the lesser of R and .09,

                   R2 is the greater of R and .09,

                   R is the reference interest rate defined in this

                         section, and

                   W is the weighting factor defined in this section.

 

      (c) For other annuities with options for cash settlement and contracts which have guaranteed interest with options for cash settlement, valued on the basis of the year issued, except as stated in paragraph (b), the formula for life insurance set forth in paragraph (a) applies to annuities and contracts which have guaranteed interest with a guaranteed duration in excess of 10 years, and the formula for single-premium immediate annuities stated in paragraph (b) applies to annuities and contracts which have guaranteed interest with guaranteed durations of 10 years or less.

      (d) For other annuities with no options for cash settlement and for contracts which have guaranteed interest with no options for cash settlement, the formula for single-premium immediate annuities set forth in paragraph (b) applies.

 


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      (e) For other annuities with options for cash settlement and contracts which have guaranteed interest with no options for cash settlement which are valued on the basis of a change in its fund the formula for single-premium immediate annuities stated in paragraph (b) applies.

      (f) If the interest rate for valuation for any life insurance policies issued in any calendar year determined without reference to this sentence differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of 1 percent, the interest rate for the valuation of such life insurance policies is equal to the corresponding actual rate for the immediately preceding calendar year. The interest rate for the valuation of life insurance policies issued in a calendar year must be determined for 1980 using the reference interest rate defined for 1979 and must be determined for each subsequent calendar year regardless of when NRS 688A.325 becomes operative with respect to the insurer.

      3.  The weighting factors referred to in the formulas set forth in subsection 2 are given in the following tables:

      (a) Weighting Factors for Life Insurance:

 

Guarantee

   Duration                                                                                        Weighting

     (Years)                                                                                             Factors

 

10 or less.................................................................................................. .50

More than 10 but not more than 20................................................... .45

More than 20.......................................................................................... .35

 

For life insurance, the duration of the guarantee is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values, or both, which are guaranteed in the original policy;

      (b) The weighting factor for single-premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with options for cash settlement and contracts which have guaranteed interest with options for cash settlement is .80; and

      (c) Weighting factors for other annuities and for contracts which have guaranteed interest except as stated in paragraph (b), are specified in the tables in subparagraphs (1), (2) and (3), according to the rules and definitions in subparagraphs (4), (5) and (6) as follows:

             (1) For annuities and contracts which have guaranteed interest valued on the basis of the year issued:

 

 

Guarantee

   Duration                                                                       Weighting Factor

     (Years)                                                                           for Plan Type

                                                                                      A               B               C

 

5 or less..................................................................... .80           .60            .50

More than 5, but not more than 10..................... .75           .60            .50

More than 10, but not more than 20................... .65           .50            .45

More than 2............................................................. .45           .35            .35

 


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             (2) For annuities and contracts which have guaranteed interest valued on a change in fund basis, the factors shown in subparagraph (1):

 

                                                                                          Weighting Factor

                                                                                             for Plan Type

                                                                                      A               B               C

 

Increased by............................................................ .15           .25            .05

 

             (3) For annuities and contracts which have guaranteed interest valued on the basis of the year issued, (other than those with no options for cash settlement) which do not guarantee interest on considerations received more than 1 year after issue or purchase and for annuities and contracts which have guaranteed interest valued on a change in fund basis which do not guarantee interest rates on considerations received more than 12 months beyond the valuation date, the factors shown in subparagraph (1) or derived in subparagraph (2) increased by .05.

             (4) For other annuities with options for cash settlement and contracts which have guaranteed interest with options for cash settlement, the guaranteed duration is the number of years for which the contract guarantees interest rates in excess of the interest rate for the valuation of life insurance policies with a guaranteed duration in excess of 20 years. For other annuities with no options for cash settlement and for contracts which have guaranteed interest with no options for cash settlement, the guaranteed duration is the number of years from the date of issue or date of purchase to the date on which the annuity benefits are scheduled to commence.

             (5) The types of plans listed in this subsection have the following characteristics:

             Plan Type A

             Under this plan the policyholder:

                   (I) May withdraw money only with an adjustment to reflect changes in interest rates or the value of assets since the insurer’s receipt of the money, or without such an adjustment but in installments payable over 5 years or more;

                   (II) May withdraw money as an immediate life annuity; or

                   (III) Is not permitted to withdraw money.

             Plan Type B

             Under this plan, before expiration of the guaranteed interest rate, the policyholder:

                   (I) May withdraw money only with an adjustment to reflect changes in interest rates or the value of assets since the insurer’s receipt of the money, or without such an adjustment but in installments payable over 5 years or more; or

                   (II) Is not permitted to withdraw money.

Ê At the end of the guaranteed interest rate, the policyholder may withdraw money without such an adjustment in a single sum or in installments over a period of less than 5 years.

             Plan Type C

             Under this plan the policyholder may withdraw money before expiration of the guaranteed interest rate in a single sum or in installments over a period of less than 5 years:

 


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                   (I) Without any adjustment to reflect changes in interest rates or the value of assets since the insurer’s receipt of the money; or

                   (II) Subject only to a fixed charge for surrender which is stipulated in the contract as a percentage of the fund.

             (6) An insurer may elect to value contracts which have guaranteed interest with options for cash settlement and annuities with options for cash settlement on the basis of the year issued or a change in fund basis. Contracts which have guaranteed interest but no options for cash settlement and annuities with no options for cash settlement must be valued on the basis of the year issued. As used in this section, “valuation on the basis of the year issued” means a basis of valuation under which the interest rate used to determine the minimum standard of valuation for the entire duration of an annuity or contract with guaranteed interest is the interest rate of valuation for the year of issue or the year of purchase of the annuity or contract, and “change in fund basis of valuation” means a basis of valuation under which the interest rate used to determine the minimum standard of valuation applicable to each change in the fund held under the annuity or contract is the interest rate for valuation for the year of the change in the fund.

      4.  For purposes of subsection 2, “reference interest rate” means:

      (a) For all life insurance, the lesser of the average over 36 months and the average over 12 months, ending on June 30 of the calendar year next preceding the year of issue, of Moody’s Corporate Bond Yield Average—Monthly Average Corporates, as published by Moody’s Investors Service, Inc.

      (b) For single-premium immediate annuities, annuity benefits involving life contingencies arising from other annuities with options for cash settlement and contracts which have guaranteed interest with options for cash settlement, the average over 12 months, ending on June 30 of the calendar year of issue or year of purchase, of Moody’s Corporate Bond Yield Average—Monthly Average Corporates, as published by Moody’s Investors Service, Inc.

      (c) For other annuities with options for cash settlement and contracts which have guaranteed interest with options for cash settlement, valued on the basis of the year issued, except as stated in paragraph (b), with a guaranteed duration of more than 10 years, the lesser of the average over 36 months and the average over 12 months, ending on June 30 of the calendar year of issue or purchase, of Moody’s Corporate Bond Yield Average—Monthly Average Corporates, as published by Moody’s Investors Service, Inc.

      (d) For other annuities with options for cash settlement and guaranteed interest with options for cash settlement, valued on the basis of the year issued, except as stated in paragraph (b), with a guaranteed duration of 10 years or less, the average over 12 months, ending on June 30 of the calendar year issued or purchased, of Moody’s Corporate Bond Yield Average—Monthly Average Corporates, as published by Moody’s Investors Service, Inc.

      (e) For other annuities with no options for cash settlement and for contracts which have guaranteed interest with no option for cash settlement, the average over 12 months, ending on June 30 of the calendar year issued or purchased, of Moody’s Corporate Bond Yield Average—Monthly Average Corporates, as published by Moody’s Investors Service, Inc.

 


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      (f) For other annuities with options for cash settlement and contracts which have guaranteed interest with options for cash settlement valued on a change in fund basis, except as stated in paragraph (b), the average over 12 months, ending on June 30 of the calendar year of the change in the fund, of Moody’s Corporate Bond Yield Average—Monthly Average Corporates, as published by Moody’s Investors Service, Inc.

      5.  If the publication of Moody’s Corporate Bond Yield Average—Monthly Average Corporates by Moody’s Investors Service, Inc., ends or the National Association of Insurance Commissioners determines that Moody’s Corporate Bond Yield Average—Monthly Average Corporates is no longer appropriate for determination of the reference interest rate, an alternative method for determination of the reference interest rate which is adopted by the [National Association of Insurance Commissioners] NAIC and approved by regulation of the Commissioner may be substituted.

      6.  The minimum standard for the valuation of policies and contracts issued before January 1, 1972, must be that provided by the laws in effect immediately preceding that date.

      7.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only to, or in connection with, policies and contracts issued on or after January 1, 1972, and before the operative date of the Valuation Manual.

      Sec. 40.3. NRS 681B.130 is hereby amended to read as follows:

      681B.130  1.  Except as otherwise provided in subsection 4 and in NRS 681B.150, reserves, according to the Commissioners’ reserve valuation method, for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums must be the excess, if any, of the present value, at the date of valuation, of the future guaranteed benefits provided for by the policies over the then present value of any future modified net premiums therefor. The modified net premiums for the policy must be such a uniform percentage of the respective contract premiums for those benefits that the present value, at the date of issue of the policy, of all the modified net premiums are equal to the sum of the then present value of the benefits provided for by the policy and the excess of the premium set forth in paragraph (a) over that set forth in paragraph (b), as follows:

      (a) A net level annual premium equal to the present value, at the date of issue, of such benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one per annum payable on the first and each subsequent anniversary of such policy on which a premium falls due. The net level annual premium must not exceed the net level annual premium on the 19-year premium whole life plan for insurance of the same amount at an age 1 year higher than the age at the time the policy is issued.

      (b) A net 1-year term premium for such benefits provided for in the first policy year.

      2.  If any life insurance policy issued on or after January 1, 1987, for which the contract premium in the first policy year exceeds that of the second year, and for which no comparable additional benefit is provided in the first year in return for the excess premium and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than the excess premium, the reserve according to the Commissioners’ reserve valuation method as of any policy anniversary occurring on or before the assumed ending date, which is the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than the excess premium, must, except as otherwise provided in NRS 681B.150, be the greater of:

 


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anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than the excess premium, must, except as otherwise provided in NRS 681B.150, be the greater of:

      (a) The reserve as of the policy anniversary calculated as described in subsection 1; and

      (b) The reserve as of the policy anniversary calculated as described in subsection 1, but with:

             (1) The value defined in paragraph (a) of subsection 1 being reduced by 15 percent of the amount of the excess first-year premium;

             (2) All present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date;

             (3) The policy being assumed to mature on such date as an endowment; and

             (4) The cash surrender value provided on that date being considered as an endowment benefit. In making the above comparison, the mortality and interest bases stated in NRS 681B.120 and 681B.125 must be used.

      3.  Reserves according to the Commissioners’ reserve valuation method for:

      (a) Life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums;

      (b) Group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer (including a partnership or sole proprietorship), by an employee organization or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section 408 of the Internal Revenue Code, as amended;

      (c) Disability and accidental death benefits in all policies and contracts; and

      (d) All other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts,

Ê must be calculated by a method consistent with the principles of subsection 1 and this subsection, except that any extra premiums charged because of impairments or special hazards must be disregarded in the determination of modified net premiums.

      4.  This subsection applies to all annuity and pure endowment contracts except those group annuity and pure endowment contracts for which reserves according to the Commissioners’ reserve valuation method are to be calculated by a method consistent with the principles of subsections 1, 2 and 3. Reserves according to the Commissioners’ annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in those contracts must be the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, provided for by those contracts at the end of each respective contract year, over the present value, at the date of valuation, of any future valuation considerations derived from future gross considerations, required by the terms of the contract, which become payable before the end of such respective contract year. The future guaranteed benefits must be determined by using the mortality table, if any, and the interest rate or rates specified in such contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of the contracts to determine nonforfeiture values.

 


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considerations are the portions of the respective gross considerations applied under the terms of the contracts to determine nonforfeiture values.

      5.  An insurer’s aggregate reserves for all life insurance policies, excluding disability and accidental death benefits, issued on or after January 1, 1972, must not be less than the aggregate reserves calculated in accordance with the methods set forth in this section, NRS 681B.145 and 681B.150, and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for those policies.

      6.  An insurer’s aggregate reserves for all policies, contracts and benefits must not be less than the aggregate reserves determined by a qualified actuary to be necessary for a favorable opinion under NRS 681B.210 and 681B.220.

      7.  The minimum standard for the valuation of policies and contracts issued before January 1, 1972, must be that provided by the laws in effect immediately preceding that date.

      8.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only to, or in connection with, policies and contracts issued on or after January 1, 1972, and before the operative date of the Valuation Manual.

      Sec. 40.35. NRS 681B.140 is hereby amended to read as follows:

      681B.140  1.  Reserves for any category of policies, contracts or benefits as established by the Commissioner, issued on or after January 1, 1972, may be calculated, at the option of the insurer, according to any standards which produce greater aggregate reserves for the category than those calculated according to the minimum standards provided by subsections 2 and 3 of NRS 681B.120 and 681B.125, but the rate or rates of interest used for policies and contracts other than the annuity and pure endowment contracts must not be higher than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided for in such policies.

      2.  Any insurer which has adopted a standard of valuation producing greater aggregate reserves as described in subsection 1 may, with the approval of the Commissioner, adopt a lower standard of valuation, but not lower than the minimum described in subsection 1.

      3.  The minimum standard for the valuation of policies and contracts issued before January 1, 1972, must be that provided by the laws in effect immediately preceding that date.

      4.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only to, or in connection with, policies and contracts issued on or after January 1, 1972, and before the operative date of the Valuation Manual.

      Sec. 40.4. NRS 681B.145 is hereby amended to read as follows:

      681B.145  1.  For any plan of life insurance which provides for the determination of a future premium, the amounts of which are to be determined by the insurer based on estimates of future experience, or for any plan of life insurance or annuity which is of such a nature that the minimum reserves cannot be determined by the methods described in NRS 681B.130 and 681B.150, the reserves which are held under the plan must be:

      [1.](a) Appropriate in relation to the benefits and the pattern of premiums for the plan; and

      [2.](b) Computed by a method which is consistent with the principles of standard valuation contained in this chapter.

 


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      2.  The minimum standard for the valuation of policies and contracts issued before January 1, 1972, must be that provided by the laws in effect immediately preceding that date.

      3.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only to, or in connection with, policies and contracts issued on or after January 1, 1972, and before the operative date of the Valuation Manual.

      Sec. 40.43. NRS 681B.150 is hereby amended to read as follows:

      681B.150  1.  If in any contract year the gross premium charged by any life insurer on any policy or contract issued on or after January 1, 1972, is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve thereon but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for the policy or contract is the greater of:

      [1.](a) The reserve calculated according to the mortality table, rate of interest and method actually used for the policy or contract; or

      [2.](b) The reserve calculated by the method actually used for the policy or contract, but using the minimum valuation standards of mortality and rate of interest, and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. The minimum valuation standards of mortality and rate of interest referred to in this [section] subsection are the standards stated in NRS 681B.120 and 681B.125.

      [3.]2.  If any life insurance policy is issued on or after January 1, 1987, for which the gross premium in the first policy year exceeds that of the second year and no comparable additional benefit is provided in the first year in return for the excess premium, and which provides an endowment benefit or a cash surrender value, or a combination thereof, in an amount greater than the excess premium, the provisions of this section must be applied as if the method actually used in calculating the reserve for the policy were the method described in NRS 681B.130 other than in subsection 2 of that section. The minimum reserve required at each policy anniversary of such a policy is the greater of the minimum reserve calculated in accordance with NRS 681B.130, including subsection 2 of that section, and the minimum reserve calculated in accordance with this [section.] subsection and subsection 1.

      3.  The minimum standard for the valuation of policies and contracts issued before January 1, 1972, must be that provided by the laws in effect immediately preceding that date.

      4.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only to, or in connection with, policies and contracts issued on or after January 1, 1972, and before the operative date of the Valuation Manual.

      Sec. 40.45. NRS 681B.160 is hereby amended to read as follows:

      681B.160  1.  Except as otherwise provided in subsection 5, all bonds or other evidences of debt having a fixed term and rate of interest held by an insurer may, if amply secured and not in default as to principal or interest, be valued as follows:

      (a) If purchased at par, at the par value.

      (b) If purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at maturity and so as to yield in the meantime the effective rate of interest at which the purchase was made or, in lieu of that method, according to an accepted method of valuation that is approved by the Commissioner.

 


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ê2015 Statutes of Nevada, Page 3412 (Chapter 522, SB 67)ê

 

meantime the effective rate of interest at which the purchase was made or, in lieu of that method, according to an accepted method of valuation that is approved by the Commissioner.

      2.  The purchase price must not be taken at a higher figure than the actual market value at the time of purchase, plus actual brokerage, transfer, postage or express charges paid in the acquisition of such securities.

      3.  Unless otherwise provided by a valuation established or approved by the Commissioner, the security must not be carried at above the call price for the entire issue during any period within which the security may be so called.

      4.  The Commissioner has full discretion in determining the method of calculating values pursuant to this section.

      5.  A valuation determined pursuant to this section must not be inconsistent with any applicable valuation or method then currently formulated or approved by the [National Association of Insurance Commissioners or its successor organization.] NAIC.

      Sec. 40.47. NRS 681B.170 is hereby amended to read as follows:

      681B.170  1.  Except as otherwise provided in subsection 4, securities, other than those specified in NRS 681B.160, held by an insurer must be valued, in the discretion of the Commissioner, at their market value, or at their appraised value, or at prices determined by the Commissioner as representing their fair market value.

      2.  Preferred or guaranteed stocks or shares while paying full dividends may be carried at a fixed value in lieu of market value, at the discretion of the Commissioner and in accordance with a method of computation approved by the Commissioner.

      3.  The stock of a subsidiary of an insurer must be valued on the basis of the value of only those assets of the subsidiary as would constitute lawful investments of the insurer if acquired or held directly by the insurer.

      4.  A valuation determined pursuant to this section must not be inconsistent with any applicable valuation or method then currently formulated or approved by the [National Association of Insurance Commissioners or its successor organization.] NAIC.

      Sec. 40.5. NRS 681B.200 is hereby amended to read as follows:

      681B.200  1.  As used in NRS 681B.200 to 681B.260, inclusive, “qualified actuary” means a natural person who is qualified to sign the applicable statement of actuarial opinion in accordance with the qualification standards set by the American Academy of Actuaries for an actuary signing such a statement.

      2.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only before the operative date of the Valuation Manual.

      Sec. 40.55. NRS 681B.210 is hereby amended to read as follows:

      681B.210  1.  Every insurer doing business in this state shall annually submit the opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the Commissioner by regulation are computed appropriately, are based on assumptions which satisfy contractual provisions, are consistent with prior reported amounts, and comply with applicable laws of this state. The Commissioner by regulation may further define or enlarge the scope of this opinion.

 


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      2.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only before the operative date of the Valuation Manual.

      Sec. 40.6. NRS 681B.220 is hereby amended to read as follows:

      681B.220  1.  Every such insurer, unless exempted by or pursuant to regulation, shall also annually submit an opinion of the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the Commissioner by regulation, when considered in light of the assets held by the insurer with respect to the reserves and related actuarial items, including the earnings on the assets invested and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the insurer’s obligations under the policies and contracts, including the benefits under and expenses associated with the policies and contracts.

      2.  The Commissioner may provide by regulation for a period of transition for establishing any higher reserves which the qualified actuary may deem necessary in order to render the opinion required by this section and NRS 681B.210.

      3.  The holding of additional reserves determined by a qualified actuary to be necessary to render the opinion required by this section or NRS 681B.210, shall not be deemed to be the adoption of a higher standard of valuation for the purposes of NRS 681B.120 or 681B.140.

      4.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only before the operative date of the Valuation Manual.

      Sec. 40.65. NRS 681B.230 is hereby amended to read as follows:

      681B.230  1.  Each opinion required by NRS 681B.220 must be supported by memorandum, in form and substance acceptable to the Commissioner as specified by regulation.

      2.  If an insurer fails to provide a supporting memorandum at the request of the Commissioner within a period specified by regulation, or the Commissioner determines that the supporting memorandum provided by the insurer fails to meet the standards prescribed by the regulations or is otherwise unacceptable to the Commissioner, the Commissioner may engage a qualified actuary at the expense of the insurer to review the opinion and the basis for the opinion and prepare such supporting memorandum as is required by the Commissioner.

      3.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only before the operative date of the Valuation Manual.

      Sec. 40.7. NRS 681B.240 is hereby amended to read as follows:

      681B.240  1.  Every opinion must:

      (a) Be submitted with the annual statement reflecting the valuation of reserve liabilities for each year ending on or after December 31, 1996.

      (b) Apply to all business in force including, without limitation, individual and group health insurance plans, in form and substance acceptable to the Commissioner as specified by regulation.

      (c) Be based on standards adopted from time to time by the Actuarial Standards Board or a successor organization approved by the Commissioner and on such additional standards as the Commissioner may by regulation prescribe.

 


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      2.  In the case of an opinion required to be submitted by a foreign or alien company, the Commissioner may accept the opinion filed by that company with the commissioner of insurance of another state if the Commissioner determines that the opinion reasonably meets the requirements applicable to an insurer domiciled in this state.

      3.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only before the operative date of the Valuation Manual.

      Sec. 40.75. NRS 681B.250 is hereby amended to read as follows:

      681B.250  1.  Except in a case of fraud or willful misconduct, a qualified actuary who is appointed by an insurer to issue an opinion pursuant to this chapter or any regulation adopted pursuant thereto is not liable for damages to any person other than an affected insurer or the Commissioner for any act, error, omission, decision or conduct with respect to the actuary’s opinion.

      2.  Disciplinary action by the Commissioner against an actuary must be prescribed by regulation by the Commissioner.

      3.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only before the operative date of the Valuation Manual.

      Sec. 41. NRS 681B.260 is hereby amended to read as follows:

      681B.260  1.  Except as otherwise provided in this section and NRS 239.0115, and sections 33, 38 and 39 of this act, [an opinion,] any documents and [any] other material or information provided by an insurer to the Commissioner , which constitute a memorandum in support of an opinion, and any other material provided to the Commissioner in connection [therewith,] with such a memorandum, must be kept confidential by the Commissioner, is not open to the public, and is not subject to subpoena, except for the purpose of defending an action seeking damages from any person by reason of any action required by NRS 681B.200 to 681B.260, inclusive, or by any regulation adopted under those sections.

      2.  A memorandum or other material may be released by the Commissioner with the written consent of the insurer or to the American Academy of Actuaries or its successor organization upon request stating that the memorandum or other material is required for the purpose of professional disciplinary proceedings and setting forth procedures satisfactory to the Commissioner for preserving the confidentiality of the memorandum or other material.

      3.  If any portion of a confidential memorandum is cited by the insurer in its marketing or is cited before any governmental agency other than a state commissioner of insurance or is released by an insurer to the public, all portions of the memorandum are no longer confidential.

      4.  The Commissioner may use the documents, materials and other information described in this section in the furtherance of any regulatory or legal action brought as part of the Commissioner’s official duties.

      5.  Neither the Commissioner nor any other person in receipt of documents, materials or other information obtained while acting under the authority of the Commissioner may be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to this section.

      6.  No waiver of any applicable privilege or claim of confidentiality in the documents, materials or other information described in this section shall occur as a result of disclosure to the Commissioner pursuant to this section or as a result of sharing as authorized in subsection 8 of NRS 679B.190.

 


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shall occur as a result of disclosure to the Commissioner pursuant to this section or as a result of sharing as authorized in subsection 8 of NRS 679B.190.

      7.  A memorandum in support of an opinion, and any other material provided by the applicable company or insurer to the Commissioner in connection with the memorandum, may be subject to subpoena for the purpose of defending an action seeking damages from the actuary submitting the memorandum by reason of an action required by this section.

      8.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only before the operative date of the Valuation Manual.

      Sec. 41.3. NRS 681B.270 is hereby amended to read as follows:

      681B.270  [The Commissioner shall adopt by regulation minimum standards for the valuation of reserves of other insurers offering]

      1.  For health insurance contracts of any kind [,] issued on or after January 1, 1972, and before the operative date of the Valuation Manual, by health insurers, corporations for hospital, medical and dental service, health maintenance organizations and plans for dental care [.] , the minimum standard of valuation is the standard adopted by the Commissioner by regulation.

      2.  The minimum standard for the valuation of policies and contracts issued before January 1, 1972, must be that provided by the laws in effect immediately preceding that date.

      3.  Except as otherwise provided in section 39.5 of this act, the provisions of this section apply only before the operative date of the Valuation Manual.

      Sec. 41.7. NRS 681B.290 is hereby amended to read as follows:

      681B.290  1.  Except as otherwise provided in subsection 3, on or before March 1 of each year, each domestic insurer, and each foreign insurer domiciled in a state which does not have requirements for reporting risk-based capital, that transacts property, casualty, life or health insurance in this state shall prepare and submit to the Commissioner, and to each person designated by the Commissioner, a report of the level of the risk-based capital of the insurer as of the end of the immediately preceding calendar year. The report must be in such form and contain such information as required by the regulations adopted by the Commissioner pursuant to this section.

      2.  The Commissioner shall adopt regulations concerning the amount of risk-based capital required to be maintained by each insurer licensed to do business in this state that is transacting property, casualty, life or health insurance in this state. The regulations must be consistent with the instructions for reporting risk-based capital adopted by the [National Association of Insurance Commissioners,] NAIC, as those instructions existed on January 1, 1997. If the instructions are amended, the Commissioner may amend the regulations to maintain consistency with the instructions if the Commissioner determines that the amended instructions are appropriate for use in this state.

      3.  The Commissioner may exempt from the provisions of this section:

 


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      (a) A domestic insurer who:

             (1) Does not transact insurance in any other state;

             (2) Does not assume reinsurance that is more than 5 percent of the direct premiums written by the insurer; and

             (3) Writes annual premiums of not more than $2,000,000.

      (b) A prepaid limited health service organization that provides or arranges for the provision of limited health services to fewer than 1,000 enrollees.

      4.  As used in this section, “prepaid limited health service organization” has the meaning ascribed to it in NRS 695F.050.

      Sec. 42. Chapter 682A of NRS is hereby amended by adding thereto the provisions set forth as sections 43 to 230, inclusive, of this act.

      Sec. 43. As used in this chapter, unless the context otherwise requires, the words and terms defined in sections 44 to 130, inclusive, of this act, have the meanings ascribed to them in those sections.

      Sec. 44. “Acceptable collateral” means:

      1.  As to securities lending transactions, and for the purpose of calculating counterparty exposure amount, cash, cash equivalents, letters of credit, direct obligations of, or securities that are fully guaranteed as to principal and interest by, the Federal Government or any agency thereof, or by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation and, as to lending foreign securities, sovereign debt rated 1 by the SVO;

      2.  As to repurchase transactions, cash, cash equivalents and direct obligations of, or securities that are fully guaranteed as to principal and interest by, the Federal Government or any agency thereof, or by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation; and

      3.  As to reverse repurchase transactions, cash and cash equivalents.

      Sec. 45. “Acceptable private mortgage insurance” means insurance written by a private insurer protecting a mortgage lender against loss occasioned by a mortgage loan default and issued by a licensed mortgage insurance company with a rating of 1 by the SVO, or a rating issued by a nationally recognized statistical rating organization equivalent to a rating of 1 by the SVO, that covers losses up to an 80 percent loan-to-value ratio.

      Sec. 46. “Accident and health insurance” means protection which provides payment of benefits for covered sickness or accidental injury. The term does not include credit insurance, disability insurance, accidental death and dismemberment insurance and long-term care insurance.

      Sec. 47. “Accident and health insurer” means a licensed life or health insurer or health services corporation whose insurance premiums and required statutory reserves for accident and health insurance constitute at least 95 percent of the total premium considerations or total statutory required reserves, respectively.

      Sec. 48. “Admitted asset” means an asset permitted to be reported as an admitted asset on the statutory financial statement of the insurer most recently required to be filed with the Commissioner. The term does not include assets of separate accounts, the investments of which are not subject to the provisions of this chapter.

      Sec. 49. “Affiliate” means, as to any person, another person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the person.

 

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