Existing law governs industrial insurers in this State that provide benefits to employees who are injured in the course of employment. (Chapter 616B of NRS) Existing law authorizes certain groups of public or private employers to act as an association of self-insured employers if the group and each employer within the group meet certain requirements. (NRS 616B.350-616B.446) Existing law requires a board of trustees to operate any such association and to employ: (1) an administrator of the association to carry out the policies of the board and perform such duties as the board delegates; and (2) a third-party administrator to administer the plan of insurance of the association. Existing law prohibits the administrator of an association from performing any of the duties assigned to the third-party administrator. (NRS 616B.365) Section 3 of this bill specifies that the administrator of an association is prohibited from directly administering claims. Existing law also prohibits the administrator of the association and the third-party administrator from having a direct or indirect financial interest in each other. (NRS 616B.371) Section 4 of this bill removes the prohibition on the administrator of the association and the third-party administrator having a financial interest in each other. Section 1 of this bill revises a definition of the term “association's administrator” to specify that the responsibilities of the administrator of the association to carry out the daily operations of the association are at the direction of the board of trustees. Existing law requires a third-party administrator for an association of self-insured employers to obtain a certificate as an administrator from the Commissioner of Insurance and to file with the Commissioner a surety bond for the benefit of any person damaged by any fraudulent act or conduct of the administrator. (NRS 616B.503, 683A.08524, 683A.0857) Existing law also requires the third-party administrator to file with the Commissioner an additional surety bond conditioned upon the faithful performance of its duties relative to a particular association of self-insured employers. Existing law requires the administrator of the association to file a similar surety bond relative to the association. (NRS 616B.353) Section 2 of this bill eliminates the requirement for the third-party administrator to file an additional surety bond relative to its duties to a particular association. Section 5 of this bill makes a conforming change to remove the procedure for terminating liability on the bond eliminated by section 2. Existing law establishes the Fund for Workers' Compensation and Safety within the State Treasury. (NRS 616A.425) Within the Fund, existing law creates a Subsequent Injury Account for each of the following insurers: (1) self-insured employers; (2) associations of self-insured public or private employers; and (3) private carriers. (NRS 616B.554, 616B.575, 616B.584) Existing law requires that money in the Accounts be used to provide compensation or reimbursement in situations where an employee who has a preexisting permanent physical impairment incurs a subsequent disability by injury arising out of and in the course of employment which entitles the employee to compensation for the combined disability that is substantially greater than that which would have resulted from the subsequent injury alone. (NRS 616B.545-616B.590) Existing law requires a board for administration or the Administrator of the Division of Industrial Relations of the Department of Business and Industry to administer each Account. (NRS 616B.548, 616B.554, 616B.569, 616B.575, 616B.584) Existing law and regulations require self-insured employers, associations of self-insured public or private employers and private carriers to pay an annual assessment which funds the Accounts. (NRS 616B.554, 616B.575, 616B.584; chapter 616B of NAC) Sections 6, 9 and 12 of this bill remove the authority to adopt regulations which impose such assessments from each board for administration and the Administrator of the Division, and section 16 of this bill voids the provisions of existing regulations relating to such assessments, thus eliminating the requirement for assessments to be paid for each Account. Sections 7, 8, 10, 11, 13 and 14 of this bill require an employee to have incurred a subsequent injury and disability on or before September 30, 2025, in order for the compensation or reimbursement provisions to apply, thus prohibiting any claims against the Accounts due to a subsequent injury and disability which is incurred on or after October 1, 2025. For purposes of calculating the amount of a premium which is due pursuant to the terms of a policy of industrial insurance, existing law provides that the maximum amount paid to any one employee for services performed during the 12-month period during which a policy is effective shall be deemed to be $36,000. (NRS 616B.222) Existing law also deems as $36,000 to be the maximum amount paid in a policy year to an officer or manager of a quasi-public or private corporation or limited-liability company who receives pay for services performed as an officer, manager or employee of the corporation or company. (NRS 616B.624) Sections 15 and 18 of this bill eliminate the $36,000 maximum amount of pay for employees for purposes of calculating the amount of a premium which is due pursuant to the terms of a policy of industrial insurance. Existing law requires the Administrator of the Division, at least every 5 years, to audit all insurers who provide benefits to injured employees, including associations of self-insured employers. (NRS 616A.270, 616B.003) Existing law also requires the Commissioner of Insurance, at least annually, to audit each association of self-insured employers to verify certain information. (NRS 616B.410) Section 18 repeals the requirement that the Commissioner examine each association of self-insured employers annually.

Statutes affected:
As Introduced: 616A.060, 616B.353, 616B.365, 616B.371, 616B.440, 616B.554, 616B.557, 616B.560, 616B.575, 616B.578, 616B.581, 616B.584, 616B.587, 616B.590, 616B.624
BDR: 616A.060, 616B.353, 616B.365, 616B.371, 616B.440, 616B.554, 616B.557, 616B.560, 616B.575, 616B.578, 616B.581, 616B.584, 616B.587, 616B.590, 616B.624