[Rev. 11/21/2013 1:11:08 PM--2013]

CHAPTER 687A - INSURANCE GUARANTY ASSOCIATION

NRS 687A.010        Short title.

NRS 687A.020        Applicability.

NRS 687A.030        Definitions.

NRS 687A.031        “Association” defined.

NRS 687A.033        “Covered claim” defined.

NRS 687A.035        “Insolvent insurer” defined.

NRS 687A.037        “Member insurer” defined.

NRS 687A.039        “Net direct written premiums” defined.

NRS 687A.040        Nevada Insurance Guaranty Association created.

NRS 687A.050        Board of Directors.

NRS 687A.060        Obligations, rights, powers and duties of Association.

NRS 687A.070        Plan of operation.

NRS 687A.080        Powers and duties of Commissioner.

NRS 687A.090        Subrogation; exceptions.

NRS 687A.095        Claim against person insured by insolvent insurer which is not covered claim.

NRS 687A.100        Exhaustion of remedies of insured.

NRS 687A.103        Reimbursement of Association by insolvent insurer.

NRS 687A.107        Hearing to determine whether insurer insolvent.

NRS 687A.110        Detection and prevention of insolvency: Powers and duties of Board of Directors.

NRS 687A.115        Detection and prevention of insolvency: Powers of Commissioner.

NRS 687A.120        Examination of Association; annual financial report.

NRS 687A.130        Association tax exempt; exception.

NRS 687A.140        Rates and premiums to include recoupment of amount paid by Association.

NRS 687A.150        Immunity from liability.

NRS 687A.160        Proceedings involving insolvent insurer: Stay; defense by Association.

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      NRS 687A.010  Short title.  This chapter shall be known and may be cited as the Nevada Insurance Guaranty Association Act.

      (Added to NRS by 1971, 1943)

      NRS 687A.020  Applicability.  Except as otherwise provided in subsection 5 of NRS 695E.200, this chapter applies to all direct insurance, except:

      1.  Life, annuity, health or disability insurance;

      2.  Mortgage guaranty, financial guaranty or other forms of insurance offering protection against investment risks;

      3.  Fidelity or surety bonds or any other bonding obligations;

      4.  Credit insurance as defined in NRS 690A.015;

      5.  Insurance of warranties or service contracts;

      6.  Title insurance;

      7.  Ocean marine insurance;

      8.  Any transaction or combination of transactions between a person, including affiliates of the person, and an insurer, including affiliates of the insurer, which involves the transfer of investment or credit risk unaccompanied by the transfer of insurance risk; or

      9.  Any insurance provided by or guaranteed by a governmental entity.

      (Added to NRS by 1971, 1943; A 1973, 312; 1977, 434; 1987, 1333; 1993, 1396; 1995, 1773, 2057; 1997, 579; 1999, 1833)

      NRS 687A.030  Definitions.  As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 687A.031 to 687A.039, inclusive, have the meanings ascribed to them in those sections.

      (Added to NRS by 1971, 1943; A 1977, 434; 1985, 537, 1073)

      NRS 687A.031  “Association” defined.  “Association” means the Nevada Insurance Guaranty Association created pursuant to NRS 687A.040.

      (Added to NRS by 1985, 1072)

      NRS 687A.033  “Covered claim” defined.

      1.  “Covered claim” means an unpaid claim or judgment, including a claim for unearned premiums, which arises out of and is within the coverage of an insurance policy to which this chapter applies issued by an insurer which becomes an insolvent insurer, if one of the following conditions exists:

      (a) The claimant or insured, if a natural person, is a resident of this State at the time of the insured event.

      (b) The claimant or insured, if other than a natural person, maintains its principal place of business in this State at the time of the insured event.

      (c) The property from which the first party property damage claim arises is permanently located in this State.

      (d) The claim is not a covered claim pursuant to the laws of any other state and the premium tax imposed on the insurance policy is payable in this State pursuant to NRS 680B.027.

      2.  The term does not include:

      (a) An amount that is directly or indirectly due a reinsurer, insurer, insurance pool or underwriting association, as recovered by subrogation, indemnity or contribution, or otherwise.

      (b) That part of a loss which would not be payable because of a provision for a deductible or a self-insured retention specified in the policy.

      (c) Except as otherwise provided in this paragraph, any claim filed with the Association:

             (1) More than 18 months after the date of the order of liquidation; or

             (2) After the final date set by the court for the filing of claims against the liquidator or receiver of the insolvent insurer,

Ê whichever is earlier. The provisions of this paragraph do not apply to a claim for workers’ compensation that is reopened pursuant to the provisions of NRS 616C.390 or 616C.392.

      (d) A claim filed with the Association for a loss that is incurred but is not reported to the Association before the expiration of the period specified in subparagraph (1) or (2) of paragraph (c).

      (e) An obligation to make a supplementary payment for adjustment or attorney’s fees and expenses, court costs or interest and bond premiums incurred by the insolvent insurer before the appointment of a liquidator, unless the expenses would also be a valid claim against the insured.

      (f) A first party or third party claim brought by or against an insured, if the aggregate net worth of the insured and any affiliate of the insured, as determined on a consolidated basis, is more than $25,000,000 on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer. The provisions of this paragraph do not apply to a claim for workers’ compensation. As used in this paragraph, “affiliate” means a person who directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or control with, another person. For the purpose of this definition, the terms “owns,” “is owned” and “ownership” mean ownership of an equity interest, or the equivalent thereof, of 10 percent or more.

      (Added to NRS by 1985, 1072; A 1987, 1065; 1989, 565; 1993, 1396; 1999, 2521; 2001, 2215; 2003, 3307; 2005, 1497)

      NRS 687A.035  “Insolvent insurer” defined.  “Insolvent insurer” means an insurer which has been issued a certificate of authority by the Commissioner to transact insurance in this state, either at the time the policy was issued or when the insured event occurred:

      1.  Against which a final order of liquidation with a finding of insolvency has been entered by a court of competent jurisdiction in the insurer’s state of domicile or in Nevada; or

      2.  Which is involved in judicial proceeding in its state of domicile or in Nevada related to the determination of its solvency, rehabilitation or liquidation, if the court conducting those proceedings has issued an order prohibiting the insurer from paying claims for more than 30 days.

      (Added to NRS by 1985, 1072)

      NRS 687A.037  “Member insurer” defined.  “Member insurer” means any person, except a fraternal or nonprofit service corporation which:

      1.  Writes any kind of insurance to which this chapter applies, including the exchange of reciprocal or interinsurance agreements of indemnity.

      2.  Is authorized to transact insurance in this state.

      (Added to NRS by 1985, 1073; A 2011, 3371)

      NRS 687A.039  “Net direct written premiums” defined.  “Net direct written premiums” means direct gross premiums written in this state on insurance policies to which this chapter applies, less return premiums and dividends paid or credited to policyholders on such direct business. The term does not include premiums on contracts between insurers or reinsurers.

      (Added to NRS by 1985, 1073)

      NRS 687A.040  Nevada Insurance Guaranty Association created.  There is hereby created a nonprofit unincorporated legal entity to be known as the Nevada Insurance Guaranty Association. All member insurers must be members of the Association as a condition of their authority to transact insurance in this state. The Association shall perform its functions under a plan of operation established and approved pursuant to NRS 687A.070 and shall exercise its powers through a Board of Directors established under NRS 687A.050.

      (Added to NRS by 1971, 1944; A 1985, 1074)

      NRS 687A.050  Board of Directors.

      1.  The Board of Directors of the Association shall consist of not fewer than five nor more than nine persons. The members of the Board shall be appointed by the Commissioner and shall serve at the discretion of the Commissioner. Vacancies on the Board shall be filled in the same manner as initial appointments.

      2.  A majority of the members appointed shall be the designated representatives of member insurers. If practicable, one of the members appointed as a designated representative of the member insurers must be an officer of a domestic insurer. The Commissioner shall consider among other things whether all member insurers are fairly represented.

      3.  Members of the Board may be reimbursed from the assets of the Association for expenses incurred by them as members of the Board of Directors.

      (Added to NRS by 1971, 1944; A 1977, 435; 2003, 2806)

      NRS 687A.060  Obligations, rights, powers and duties of Association.

      1.  The Association:

      (a) Is obligated to the extent of the covered claims existing before the determination of insolvency and arising within 30 days after the determination of insolvency, or before the expiration date of the policy if that date is less than 30 days after the determination, or before the insured replaces the policy or on request cancels the policy if the insured does so within 30 days after the determination. The obligation of the Association to pay a covered claim is limited to the payment of:

             (1) The entire amount of the claim, if the claim is for workers’ compensation pursuant to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS;

             (2) Not more than $300,000 for each policy if the claim is for the return of unearned premiums; or

             (3) The limit specified in a policy or $300,000, whichever is less, for each occurrence for any covered claim other than a covered claim specified in subparagraph (1) or (2).

      (b) Shall be deemed the insurer to the extent of its obligations on the covered claims and to that extent has any rights, duties and obligations of the insolvent insurer as if the insurer had not become insolvent. The rights include, without limitation, the right to seek and obtain any recoverable salvage and to subrogate a covered claim, to the extent that the Association has paid its obligation under the claim.

      (c) Shall assess member insurers amounts necessary to pay the obligations of the Association pursuant to paragraph (a) after an insolvency, the expenses of handling covered claims subsequent to an insolvency, the cost of examinations pursuant to NRS 687A.110 and other expenses authorized by this chapter. The assessment of each member insurer must be in the proportion that the net direct written premiums of the member insurer for the calendar year preceding the assessment bear to the net direct written premiums of all member insurers for the same calendar year. Each member insurer must be notified of the assessment not later than 30 days before it is due. No member insurer may be assessed in any year an amount greater than 2 percent of the net direct written premiums of that member insurer for the calendar year preceding the assessment. If the maximum assessment, together with the other assets of the Association, does not provide in any 1 year an amount sufficient to make all necessary payments, the money available may be prorated and the unpaid portion must be paid as soon as money becomes available. The Association may pay claims in any order, including the order in which the claims are received or in groups or categories. The Association may exempt or defer, in whole or in part, the assessment of any member insurer if the assessment would cause the financial statement of the member insurer to reflect amounts of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance. During the period of deferment, no dividends may be paid to shareholders or policyholders. Deferred assessments must be paid when payment will not reduce capital or surplus below required minimums. Payments must be refunded to those companies receiving larger assessments because of deferment, or, in the discretion of the company, credited against future assessments. Each member insurer must be allowed a premium tax credit for any amounts paid pursuant to the provisions of this chapter:

             (1) For assessments made before January 1, 1993, at the rate of 10 percent per year for 10 successive years beginning March 1, 1996; or

             (2) For assessments made on or after January 1, 1993, at the rate of 20 percent per year for 5 successive years beginning with the calendar year following the calendar year in which the assessments are paid.

      (d) Shall investigate claims brought against the fund and adjust, compromise, settle and pay covered claims to the extent of the obligation of the Association and deny any other claims.

      (e) Shall notify such persons as the Commissioner directs pursuant to paragraph (a) of subsection 2 of NRS 687A.080.

      (f) Shall act on claims through its employees or through one or more member insurers or other persons designated as servicing facilities. Designation of a servicing facility is subject to the approval of the Commissioner, but the designation may be declined by a member insurer.

      (g) Shall reimburse each servicing facility for obligations of the Association paid by the facility and for expenses incurred by the facility while handling claims on behalf of the Association and pay the other expenses of the Association authorized by this chapter.

      2.  The Association may:

      (a) Appear in, defend and appeal any action on a claim brought against the Association.

      (b) Employ or retain persons necessary to handle claims and perform other duties of the Association.

      (c) Borrow money necessary to carry out the purposes of this chapter in accordance with the plan of operation.

      (d) Sue or be sued.

      (e) Negotiate and become a party to contracts necessary to carry out the purposes of this chapter.

      (f) Perform other acts necessary or proper to effectuate the purposes of this chapter.

      (g) Perform any administrative acts requested by the Commissioner in furtherance of the purposes of this title and, if the cost of the action is not paid for by the Association or its member insurers, the Nevada Industrial Insurance Act.

      (h) If, at the end of any calendar year, the Board of Directors of the Association finds that the assets of the Association exceed its liabilities as estimated by the Board of Directors for the coming year, refund to the member insurers in proportion to the contribution of each that amount by which the assets of the Association exceed the liabilities.

      (i) Assess each member insurer equally not more than $100 per year for administrative expenses not related to the insolvency of any insurer.

      (Added to NRS by 1971, 1944; A 1977, 435; 1993, 1397; 1995, 2057; 1999, 2522; 2003, 3308; 2005, 2131)

      NRS 687A.070  Plan of operation.

      1.  The Association shall submit a plan of operation to the Commissioner, together with any amendments necessary or suitable to assure the fair, reasonable and equitable administration of the Association. The plan of operation and any amendments become effective upon approval in writing by the Commissioner. If the Association fails to submit a suitable plan of operation within 90 days following May 5, 1971, or if at any time thereafter the Association fails to submit suitable amendments to the plan, the Commissioner shall adopt reasonable regulations necessary or advisable to effectuate the provisions of this chapter. The regulations continue in force until modified by the Commissioner or superseded by a plan submitted by the Association and approved by the Commissioner.

      2.  All member insurers shall comply with the plan of operation.

      3.  The plan of operation must:

      (a) Establish the procedures for performance of all the duties and powers of the Association under NRS 687A.060.

      (b) Establish procedures for managing assets of the Association.

      (c) Establish the amount and method of reimbursing members of the Board of Directors under NRS 687A.050.

      (d) Establish procedures by which claims may be filed with the Association and establish acceptable forms of proof of covered claims. Notice of claims to the receiver or liquidator of the insolvent insurer shall be deemed notice to the Association or its agent and a list of those claims must be periodically submitted to the Association or similar organization in another state by the receiver or liquidator.

      (e) Establish regular places and times for meetings of the Board of Directors.

      (f) Establish procedures for keeping records of all financial transactions of the Association, its agent and the Board of Directors.

      (g) Provide that any member insurer aggrieved by any final action or decision of the Association may appeal to the Commissioner within 30 days after the action or decision.

      (h) Establish procedures for submission to the Commissioner of selections for the Board of Directors.

      (i) Contain additional provisions necessary or proper for the execution of the duties and powers of the Association.

      4.  The plan of operation may provide that any or all duties and powers of the Association, except those under paragraph (c) of subsection 1 and paragraph (c) of subsection 2 of NRS 687A.060, are delegated to a person who performs or will perform functions similar to those of this Association in two or more states. This person must be reimbursed as a servicing facility and must be paid for performance of any other functions of the Association. A delegation under this subsection takes effect only with the approval of both the Board of Directors and the Commissioner, and may be made only to a person who extends protection not substantially less favorable and effective than that provided by this chapter.

      (Added to NRS by 1971, 1946; A 1981, 106)

      NRS 687A.080  Powers and duties of Commissioner.

      1.  The Commissioner shall:

      (a) Notify the Association of the existence of an insolvent insurer not later than 3 days after the Commissioner receives notice of the determination of insolvency by a court or makes a determination of insolvency pursuant to NRS 687A.107, whichever is earlier.

      (b) Upon request of the Board of Directors of the Association, provide the Association with a statement of the net direct written premiums of each member insurer.

      2.  The Commissioner may:

      (a) Require that the Association notify the insureds of the insolvent insurer and any other interested parties of the determination of insolvency and of their rights under this chapter. Such notification must be by mail at their last known address, but if sufficient information for notification by mail is not available, notice by publication in a newspaper of general circulation is sufficient.

      (b) Suspend or revoke, after notice and opportunity for hearing, the certificate of authority to transact insurance in this State of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the Commissioner may levy a fine on any member insurer which fails to pay an assessment when due. The fine must not exceed 5 percent of the unpaid assessment per month, except that no fine may be less than $100 per month.

      (c) Revoke the designation of any servicing facility if the Commissioner finds claims are being acted upon unsatisfactorily.

      (d) Request the Association to perform any acts specified in paragraph (g) of subsection 2 of NRS 687A.060.

      (Added to NRS by 1971, 1947; A 1985, 1074; 2005, 2133)

      NRS 687A.090  Subrogation; exceptions.

      1.  Any person recovering under this chapter shall be deemed to have assigned his or her rights under the policy to the Association to the extent of the person’s recovery from the Association. Every insured or claimant seeking the protection of this chapter shall cooperate with the Association to the same extent as the person would have been required to cooperate with the insolvent insurer. Except as otherwise provided in subsection 2, the Association does not have a cause of action against the insured of the insolvent insurer for any sums it has paid out.

      2.  The Association may recover the amount of money paid to or on behalf of an insured of an insolvent insurer:

      (a) If the aggregate net worth of the insured and any affiliate of the insured, as determined on a consolidated basis, is more than $25,000,000 on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer; or

      (b) If the Association paid the money in error.

      3.  The receiver, liquidator or statutory successor of an insolvent insurer is bound by any settlements of covered claims by the Association or a similar organization in another state. The court having jurisdiction shall grant those claims priority equal to that to which the claimant would have been entitled in the absence of this chapter against the assets of the insolvent insurer. The expenses of the Association or similar organization in handling claims must be accorded the same priority as the liquidator’s expenses.

      4.  The Association shall periodically file with the receiver or liquidator of the insolvent insurer statements of the covered claims paid by the Association and estimates of anticipated claims on the Association, which statements shall preserve the rights of the Association against the assets of the insolvent insurer.

      5.  As used in this section, “affiliate” means a person who directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or control with, another person. For the purpose of this definition, the terms “owns,” “is owned” and “ownership” mean ownership of an equity interest, or the equivalent thereof, of 10 percent or more.

      (Added to NRS by 1971, 1947; A 2003, 3310)

      NRS 687A.095  Claim against person insured by insolvent insurer which is not covered claim.  A claim asserted against a person insured by an insurer which has become insolvent which, if it were not a claim by or for the benefit of a reinsurer, insurer, insurance pool or underwriting association, would be a covered claim, may be filed directly with the receiver of the insolvent insurer. These claims may not be asserted in any action against the insured of the insolvent insurer.

      (Added to NRS by 1977, 434; A 1993, 1399)

      NRS 687A.100  Exhaustion of remedies of insured.

      1.  Any person having a claim against his or her insurer, including, but not limited to, a claim for damages caused by an uninsured motorist, under any provision in the person’s insurance policy, which is also a covered claim shall first exhaust his or her right under the policy. Any amount payable on a covered claim under this chapter must be reduced by the amount of the applicable limit under the claimant’s insurance policy, regardless of whether the claimant recovers the full amount payable under that policy or exhausts only a lesser amount.

      2.  Any person having a claim which may be recovered under more than one insurance guaranty association or its equivalent shall seek recovery first from the association of the place of residence of the insured. However, if the claim is a first party claim for damage to property with a permanent location, recovery must first be sought from the association of the location of the property. If the claim is a workers’ compensation claim, recovery must first be sought from the association of the residence of the claimant. Any recovery under this chapter must be reduced by the amount of the recovery from any other insurance guaranty association or its equivalent.

      (Added to NRS by 1971, 1948; A 1993, 1399)

      NRS 687A.103  Reimbursement of Association by insolvent insurer.  If the Association pays any claims on behalf of an insurer which is an insolvent insurer within the meaning of subsection 2 of NRS 687A.035, the insurer may not accept any new business in this state until it has reimbursed the Association for the payment of the claims, including the administrative expenses incurred by the Association in acting upon and paying the claims.

      (Added to NRS by 1985, 1073)

      NRS 687A.107  Hearing to determine whether insurer insolvent.

      1.  The Commissioner may conduct a hearing to determine whether an insurer is an insolvent insurer within the meaning of subsection 2 of NRS 687A.035. The Commissioner shall notify the insurer which is the subject of the hearing not less than 3 days before the hearing. The Commissioner may consider any evidence at the hearing which the Commissioner deems relevant to the determination of the solvency of the insurer.

      2.  The Commissioner shall make a determination in writing within 15 days after the hearing. The Commissioner shall adopt regulations governing hearings pursuant to this section.

      (Added to NRS by 1985, 1073)

      NRS 687A.110  Detection and prevention of insolvency: Powers and duties of Board of Directors.  To aid in the detection and prevention of insurer insolvencies:

      1.  The Board of Directors shall, upon majority vote, notify the Commissioner of any information indicating any member insurer may be insolvent or in a financial condition hazardous to the policyholders or the public.

      2.  The Board of Directors may, upon majority vote, request that the Commissioner order an examination of any member insurer which the Board in good faith believes may be in a financial condition hazardous to the policyholders or the public. Within 30 days of the receipt of such request, the Commissioner shall begin such examination. The examination may be conducted as a National Association of Insurance Commissioners’ examination or may be conducted by such persons as the Commissioner designates. The cost of such examination shall be paid by the Association and the examination report shall be treated as are other examination reports. Except as permitted by paragraph (c) of subsection 1 of NRS 687A.115, the Commissioner shall not release an examination report to the Board of Directors prior to its release to the public. The Commissioner shall notify the Board of Directors when the examination is completed. The request for an examination shall be kept on file by the Commissioner, but it shall not be open to public inspection prior to the release of the examination report to the public.

      3.  The Board of Directors may, upon majority vote, make reports and recommendations to the Commissioner upon any matter germane to the solvency, liquidation, rehabilitation or conservation of any member insurer. Such reports and recommendations are not public documents.

      4.  The Board of Directors may, upon majority vote, make recommendations to the Commissioner for the detection and prevention of insurer insolvencies.

      5.  The Board of Directors shall, at the conclusion of any insurer insolvency in which the Association was obligated to pay covered claims, prepare a report on the history and causes of such insolvency, based on the information available to the Association, and submit such report to the Commissioner.

      (Added to NRS by 1971, 1948; A 1977, 437)

      NRS 687A.115  Detection and prevention of insolvency: Powers of Commissioner.  To aid in the detection and prevention of insurer insolvencies:

      1.  The Commissioner may:

      (a) Notify the insurance commissioners of the other states and territories of the United States and of the District of Columbia when the Commissioner revokes or suspends a license, or when the Commissioner makes any formal order that a company restrict its writing of insurance, obtain additional contributions to surplus, withdraw from the State or reinsure any part of its business or any other account for the security of policyholders or creditors.

      (b) Report to the Board of Directors any action set forth in paragraph (a) and the receipt of a report from another insurance commissioner indicating that the action has been taken elsewhere. The report shall contain all significant details of the action taken or the report received.

      (c) Report to the Board of Directors when the Commissioner has reasonable cause to believe from any examination of any member insurer, whether completed or in process, that the member insurer may be insolvent or in a financial condition hazardous to the interests of policyholders or the public.

      (d) Furnish to the Board of Directors the early warning tests developed by the National Association of Insurance Commissioners. The Board may use the information furnished to carry out its duties. Except as otherwise provided in NRS 239.0115, the report and the information contained therein is not a public record and shall be kept confidential by the Board of Directors until it is made public by the Commissioner or other lawful authority.

      2.  The Commissioner may seek the advice and recommendations of the Board of Directors concerning any matter affecting the duties and responsibilities of the Commissioner relating to the financial condition of member insurers and of insurers seeking admission to transact business in this State.

      (Added to NRS by 1977, 433; A 2007, 2157)

      NRS 687A.120  Examination of Association; annual financial report.  The Association is subject to examination and regulation by the Commissioner. The Board of Directors shall submit, not later than March 30 of each year, a financial report for the preceding calendar year in a form approved by the Commissioner.

      (Added to NRS by 1971, 1949)

      NRS 687A.130  Association tax exempt; exception.  The Association is exempt from payment of all fees and all taxes levied by this State or any of its subdivisions, except taxes:

      1.  Levied on real or personal property; or

      2.  Imposed pursuant to the provisions of chapter 363A or 363B of NRS.

      (Added to NRS by 1971, 1949; A 2003, 20th Special Session, 228)

      NRS 687A.140  Rates and premiums to include recoupment of amount paid by Association.  The rates and premiums charged for insurance policies to which this chapter applies shall include amounts sufficient to recoup a sum equal to the amounts paid to the Association by the member insurer less any amounts returned to the member insurer by the Association, or less any premium tax credits allowed under this chapter, and such rates shall not be deemed excessive as a result of containing such recoupment allowances.

      (Added to NRS by 1971, 1949)

      NRS 687A.150  Immunity from liability.  There is no liability, and no cause of action of any nature shall arise against any member insurer, the Association, its agents or employees, the Board of Directors, the Commissioner or the representatives of the Commissioner, for any reasonable action taken by them in the performance of their duties and powers under this chapter.

      (Added to NRS by 1971, 1949)

      NRS 687A.160  Proceedings involving insolvent insurer: Stay; defense by Association.

      1.  Upon the application of the Association or insured and upon cause shown, all proceedings in which the insolvent insurer is a party, or is obligated to defend a party, in any court in this state must be stayed for 3 months and any time thereafter ordered by the court after the date the insolvency is determined to permit proper defense by the Association of all pending causes of action. Cause may be established by affidavit showing the unavailability of the insolvent insurer’s files or records which are reasonably necessary for the Association to confirm coverage and adjust the claim.

      2.  If an insolvent insurer has failed to defend an insured in any action, the Association may apply on its own behalf or on behalf of the insured to have any judgment or order in the action set aside and the Association may defend against the action on its merits.

      (Added to NRS by 1971, 1949; A 1977, 438; 1987, 928)