[Rev. 11/21/2013 1:17:02 PM--2013]

CHAPTER 693B - CONTINUITY OF MANAGEMENT DURING EMERGENCY RESULTING FROM ATTACK

NRS 693B.010        Definitions.

NRS 693B.020        Adoption of bylaws for emergency: Procedure; provisions; approval.

NRS 693B.030        Change of location of principal office; notice to Commissioner.

NRS 693B.040        Board meetings: Call; notice.

NRS 693B.050        Emergency board of directors: Numbers; authorized action.

NRS 693B.060        Emergency board of directors: Powers.

NRS 693B.070        Commissioner to be notified of meetings of emergency board of directors.

NRS 693B.080        Acting directors: Qualifications; oaths not required.

NRS 693B.090        Acting directors: Powers; compensation.

NRS 693B.100        Acting officers: Powers, duties and compensation.

NRS 693B.110        Designation of acting directors by Commissioner.

NRS 693B.120        Power of Commissioner to resolve controversy concerning actions of emergency board of directors.

NRS 693B.130        Commissioner may declare certain provisions of law operative and inoperative; powers of companies, officers and directors.

NRS 693B.140        Commissioner may take possession of business and property of organizations.

NRS 693B.150        Commissioner to exercise powers only if court not available to make necessary orders; regulations, directives and orders of Commissioner.

NRS 693B.160        Presumption of acute emergency; powers of board or emergency board of directors.

NRS 693B.170        Effect of chapter on organization’s power and on foreign and alien companies.

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      NRS 693B.010  Definitions.  As used in this chapter, unless the context otherwise requires:

      1.  “Acting Director” means an acting Director elected or appointed in accordance with this chapter.

      2.  “Acting officer” means an acting officer appointed in accordance with this chapter.

      3.  “Acute emergency” means a period in which, by reason of loss of life, epidemic disease, destruction or damage of property, contamination of property by radiological, chemical or bacteriological means, or disruption of the means of transportation and communication, resulting from an attack, it is impossible or impracticable for the business of insurance in this state to be conducted in strict accord with the provisions of law or charters applicable thereto.

      4.  “Attack” means any attack, actual or imminent, or series of attacks by an enemy or a foreign nation upon the United States of America causing, or which may cause, substantial damage or injury to civilian property or persons in the United States in any manner by sabotage or by the use of bombs, shellfire, or atomic, radiological, chemical, bacteriological or biological means or other weapons or processes.

      5.  “Board” means the board of directors, board of trustees, committee or similar body having control of the affairs of an organization.

      6.  “Charter” means the certificate of organization or incorporation of an organization together with its bylaws, or the agreement establishing a fund or association together with its constitution and bylaws.

      7.  “Commissioner” means the Commissioner of Insurance or other person designated to exercise the powers of that office during an acute emergency.

      8.  “Director” means a director, trustee or member of a board.

      9.  “Domestic organization” means any organization which is domiciled in this state, including, insofar as the provisions of this chapter may appropriately apply thereto, any welfare or pension fund or United States branch of an alien insurer.

      10.  “Officer” means an officer of a domestic organization.

      11.  “Organization” means any insurer, rating organization, service or advisory organization, joint underwriting association or other organization which is subject, in whole or in part, to the insurance laws of this state.

      12.  “Quorum” means the minimum number of directors required by charter and law, other than this chapter, to be present for valid action to be taken at a meeting of a board with respect to each particular item of business which may come before such meeting.

      (Added to NRS by 1971, 1818)

      NRS 693B.020  Adoption of bylaws for emergency: Procedure; provisions; approval.

      1.  With the approval of the Commissioner, any domestic organization may at any time adopt, in the same manner as in the case of ordinary bylaws, emergency bylaws to become operative during a period of acute emergency. Emergency bylaws may contain provisions with respect to the number of directors capable of acting which shall constitute its board, the number of such directors which shall constitute a quorum at a meeting of the board, the number of votes necessary for action by such board, the manner in which vacancies on the board shall be filled, the line of succession of its officers, and the interim management of the affairs of the organization.

      2.  Such provisions, if approved by the Commissioner, need not comply with the requirements of the charter of such domestic organization.

      3.  Except as provided in NRS 693B.120, the provisions of NRS 693B.040 to 693B.100, inclusive, 693B.120 and 693B.130 shall not be applicable during a period of acute emergency to any domestic organization operating in accordance with emergency bylaws approved by the Commissioner to the extent that the procedure set forth in such emergency bylaws relate to subject matter contained in NRS 693B.040 to 693B.100, inclusive.

      (Added to NRS by 1971, 1818)

      NRS 693B.030  Change of location of principal office; notice to Commissioner.  Any domestic organization, without complying with any provision of law requiring approval, or application for approval, of a change of location of its principal office may from time to time change the location thereof during an acute emergency to a suitable location within the United States, and may carry on its business at such new location during such acute emergency and for a reasonable time thereafter. Any organization which changes the location of its principal office during an acute emergency shall notify the Commissioner thereof in writing as soon as practicable, stating the address of the new location, the address of the former location, and the dates when business is ceasing at the former location and commencing at the latter location.

      (Added to NRS by 1971, 1819)

      NRS 693B.040  Board meetings: Call; notice.  Notwithstanding any contrary provision of law or of its charter, if at any time during an acute emergency affecting any domestic organization, no person otherwise empowered to call meetings of its board is capable of acting, a meeting thereof may be called by any director or acting director, or if no director or acting director is capable of acting, by any officer or acting officer. If it is impracticable or impossible to give notice of a meeting of the board in the manner prescribed by charter and law, the person calling such a meeting may give notice thereof by making such reasonable efforts as circumstances may permit to notify each director and acting director of the time and place of the meeting, but need not specify the purposes thereof. Failure of any director or acting director to receive actual notice of a meeting of directors and acting directors shall not affect the power of the directors and acting directors present at such meeting to exercise the powers of an emergency board of directors as prescribed in this section. Nothing contained in this chapter shall be construed as requiring a meeting of the board of such an organization to be convened in any manner different from that prescribed by its charter and by the provisions of law other than this chapter.

      (Added to NRS by 1971, 1819)

      NRS 693B.050  Emergency board of directors: Numbers; authorized action.  If three or more directors or acting directors of any domestic organization are present at any meeting of its board duly convened during an acute emergency affecting such domestic organization, they shall constitute its emergency board of directors which, notwithstanding any contrary provision of law or of its charter, may, subject to the limitation prescribed in this chapter, by a majority of those present, take any action which may be necessary to enable such domestic organization to meet the exigencies of the acute emergency and conduct its business during such period.

      (Added to NRS by 1971, 1820)

      NRS 693B.060  Emergency board of directors: Powers.  The powers of an emergency board of directors shall include, but shall not be limited to, the following:

      1.  At any meeting to elect such acting directors as it may deem necessary, without regard to the number of directors which would otherwise be required, to serve in any positions on such board which are vacant or in place of any directors or acting directors who are absent from such meeting, but not to elect any director on a permanent basis.

      2.  To elect such acting officers as it may deem necessary, without regard to the number of officers which would otherwise be required, to serve in any offices which are vacant or in place of any officers or acting officers who fail to appear and assume their duties, to fix the compensation and determine the powers and duties of acting officers and to remove acting officers, but not to remove any officer or fill any vacancy on a permanent basis or to cause the organization to enter into any contract of employment for a term of over 1 year.

      3.  To cause the organization to change the location of its principal office, pursuant to NRS 693B.030, or any of its places of business, and to authorize such action as it may deem appropriate to acquire space and facilities at the new locations, but not to acquire for use as its principal office property in fee or for a term of over 1 year.

      4.  To postpone any meeting of the stockholders, policyholders, members or directors of such organization if, in the judgment of the members of such emergency board of directors, it would be impracticable to hold such meeting at the time it would otherwise have been held or conducted.

      5.  If it appears to an emergency board of directors that a quorum of the board cannot be assembled within a reasonable time, to call a meeting of the stockholders, policyholders or members of the organization to be held as soon as the circumstances may reasonably permit, at a place to be designated by the emergency board of directors within this state or a contiguous state, for the purpose of electing directors to fill vacancies on the board, but for no other purpose, and to propose nominees for such election. Any such meeting of stockholders, policyholders or members shall be held upon notice given in accordance with the charter of the organization and applicable law other than this chapter.

      (Added to NRS by 1971, 1820)

      NRS 693B.070  Commissioner to be notified of meetings of emergency board of directors.  As soon as practicable after each meeting of an emergency board of directors, the person who presided thereat shall notify the Commissioner in writing of the time and place of such meeting, of the manner in which notice thereof was given, of the persons present, and of all actions taken at such meeting.

      (Added to NRS by 1971, 1821)

      NRS 693B.080  Acting directors: Qualifications; oaths not required.  No person prohibited by law or by the charter of a domestic organization from serving as a member of its board shall be eligible to serve as an acting director except that no person shall be disqualified to serve as an acting director by reason of not being a stockholder, policyholder or member of such organization, by reason of not being a resident of this state or of a contiguous state, or by reason of the number of the directors or acting directors who are officers, acting officers or employees of the organization. Any person may serve as an acting director of a fund who is a director, acting director, officer or acting officer of an organization which is party to the agreement creating the fund. No oath of acting directors shall be required.

      (Added to NRS by 1971, 1821)

      NRS 693B.090  Acting directors: Powers; compensation.  Acting directors elected pursuant to the provisions of NRS 693B.060, or appointed pursuant to the provisions of NRS 693B.110, shall be entitled to notice of and to vote at all meetings of an emergency board of directors equally with directors. Acting directors shall not be entitled to take part in the deliberations or to vote at any meeting of the board which is duly convened in accordance with the applicable provisions of its charter and of law other than this chapter, and at which a quorum is present. Each acting director shall serve until the director or acting director in whose place he or she was elected or appointed attends a meeting of the board or until a director is duly elected to fill the vacancy in which such acting director has been serving, whichever event occurs earlier. An acting director shall be entitled to the compensation, if any, payable to a director.

      (Added to NRS by 1971, 1821)

      NRS 693B.100  Acting officers: Powers, duties and compensation.  Acting officers elected pursuant to NRS 693B.060 shall have such powers and duties and receive such compensation as may from time to time be determined by the board or emergency board of directors. Each acting officer shall serve until the officer in whose place he or she was elected appears and assumes his or her duties or until a successor officer or acting officer is elected, whichever event occurs earlier.

      (Added to NRS by 1971, 1821)

      NRS 693B.110  Designation of acting directors by Commissioner.  If, at any time during an acute emergency, the number of directors or acting directors of a domestic organization who are capable of acting is less than three, the Commissioner may designate additional acting directors in such number as will bring to three the number of directors and acting directors who are capable of acting.

      (Added to NRS by 1971, 1822)

      NRS 693B.120  Power of Commissioner to resolve controversy concerning actions of emergency board of directors.  To resolve controversy as to the power of any group of persons purporting to act as an emergency board of directors so to act, the Commissioner may, upon a determination that such action will tend to promote the safe and sound and orderly conduct of the business of any domestic organization, issue orders declaring that any such group shall or shall not have the powers of an emergency board of directors, or confirming, modifying or vacating in whole or in part any action taken or purportedly taken by any such group, or removing any acting director.

      (Added to NRS by 1971, 1822)

      NRS 693B.130  Commissioner may declare certain provisions of law operative and inoperative; powers of companies, officers and directors.

      1.  At any time after an attack, upon determination by the Commissioner that such action will tend to promote certainty as to the powers of organizations or individuals pursuant to this chapter, or that such action is desirable to enable organizations to take preparatory precautions prior to the occurrence of an acute emergency, the Commissioner may declare that any provision of this chapter which the Commissioner may specify shall be operative with respect to any domestic organization or to the Nevada business of any other organization which the Commissioner may designate. Upon such declaration such organization and its directors, officers, acting directors and acting officers shall have all powers conferred by such provisions of this chapter. The failure of the Commissioner so to declare shall not be deemed to limit the powers of any organization or its directors, officers, acting directors or acting officers where an acute emergency exists in fact.

      2.  At any time after the commencement of an acute emergency or after the Commissioner has declared any provision of this chapter operative pursuant to subsection 1, upon determination by the Commissioner that an organization is able, in whole or in part, to carry on its business in compliance with its charter and the laws other than this chapter, the Commissioner may declare that any provision of this chapter which the Commissioner may specify shall be inoperative with respect to any domestic organization or to the Nevada business of any other organization which the Commissioner may designate. Upon such declaration, such organization shall be governed by its charter and the provisions of law other than this chapter except insofar as other provisions of this chapter remain operative.

      (Added to NRS by 1971, 1822)

      NRS 693B.140  Commissioner may take possession of business and property of organizations.  Upon the Commissioner’s determination that, as a result of an acute emergency, the business and affairs of an organization cannot otherwise be conducted in a safe and sound manner, the Commissioner may forthwith take possession of the business and property of the organization within this state or, if a domestic organization, its business and property wherever situated. The provisions of chapter 696B of NRS (conservation, rehabilitation, liquidation) shall be applicable in any case in which the Commissioner takes possession of an organization pursuant to this section as though the organization were an insurer of which the Commissioner had taken possession pursuant to chapter 696B of NRS (conservation, rehabilitation, liquidation), except that no such provision shall be applicable which the Commissioner has declared inapplicable pursuant to this section. The Commissioner shall have power to declare inapplicable any such provision upon determination by the Commissioner that the same is inappropriate or unnecessary to protect the interests of the public or the stockholders or creditors of the organization, in view of the acute emergency and the nature of the organization.

      (Added to NRS by 1971, 1823)

      NRS 693B.150  Commissioner to exercise powers only if court not available to make necessary orders; regulations, directives and orders of Commissioner.

      1.  The powers given the Commissioner by NRS 693B.120 and 693B.140 shall be exercised by the Commissioner only if there is no court of competent jurisdiction available to which an application can be made for an order permitting the Commissioner to exercise such powers with respect to a particular organization, but the powers conferred by NRS 693B.140 shall not be exercised in the case of an organization which is not insolvent within the meaning of NRS 696B.210, unless the Commissioner finds that such organization lacks personnel able to manage its business in the interests of the public, its stockholders and policyholders.

      2.  The Commissioner may issue general and specific regulations, directives and orders consistent with and in furtherance of the purposes of this chapter.

      (Added to NRS by 1971, 1823)

      NRS 693B.160  Presumption of acute emergency; powers of board or emergency board of directors.

      1.  In any action or proceeding it shall be presumed that an acute emergency existing within any city or county within the state constitutes an acute emergency affecting every organization doing business within such city or county.

      2.  During an acute emergency:

      (a) The board of a domestic organization which has adopted emergency bylaws, approved by the Commissioner, shall have the powers conferred by such bylaws and, except as provided in subsection 1 of NRS 693B.130, shall, to the extent that such bylaws relate to the subject matter contained in NRS 693B.040 to 693B.100, inclusive, have no other or different powers with respect to such subject matter.

      (b) The board of a domestic organization which has not adopted emergency bylaws, approved by the Commissioner, shall have all powers of an emergency board of directors pursuant to NRS 693B.030 to 693B.100, inclusive.

      (Added to NRS by 1971, 1823)

      NRS 693B.170  Effect of chapter on organization’s power and on foreign and alien companies.  Nothing in this chapter shall be construed to limit the powers of any organization, or to permit or require any organization which is not domiciled in this state, or any branch, office or agency of such organization, or the directors, officers, policyholders or stockholders of any such organization to act, or fail to act, in such a manner as would violate the laws of the jurisdiction wherein such organization has its domicile.

      (Added to NRS by 1971, 1824)