Existing law requires the Commissioner of Insurance to regulate insurance in this State and enforce the provisions of the Nevada Insurance Code. (NRS 679B.120) Section 9 of this bill requires the Commissioner to establish and administer the Regulatory Experimentation Program for Insurance Product Innovation, which is a 4-year program to enable an authorized insurer who offers at least one insurance product that provides property insurance coverage for real or personal property located in this State outside of the Program to test a qualified insurance product in this State without complying with certain provisions of the Nevada Insurance Code or certain regulations adopted pursuant thereto that would otherwise be required outside of the Program. Section 7 of this bill defines “qualified insurance product” to mean an insurance product that provides property insurance coverage for real or personal property located in this State. Section 12 of this bill sets forth the process by which an authorized insurer may apply to participate in the Program. Section 12 requires the application of the applicant to include, among other information, an explanation of any exemption from the provisions of the Nevada Insurance Code or the regulations adopted pursuant thereto that the applicant is requesting. Section 13 of this bill requires the Commissioner to approve or deny an application within 90 days after the completed application is received. Section 14 of this bill requires the Commissioner to provide written notice of the approval or denial of an application. Under section 15 of this bill, if an application is approved, the qualified insurance product offered or provided through the Program, with certain exceptions, is exempt from the provisions of the Nevada Insurance Code and the regulations adopted pursuant thereto for which an exemption was requested in the application to participate in the Program. Section 15 also limits the period of testing for a qualified insurance product under the Program to 36 months, with one extension of not more than 12 months if approved by the Commissioner. Section 10 of this bill requires the Commissioner to adopt regulations to carry out the Program. Section 11 of this bill requires certain disclosures to be provided before providing a consumer a qualified insurance product through the Program. Section 16 of this bill sets forth certain requirements relating to the retention of records and reporting by a participant in the Program. Sections 17 and 26 of this bill set forth certain requirements concerning the confidentiality and disclosure of records relating to the Program. Section 18 of this bill requires the Commissioner to submit a report to the Legislature concerning the Program on or before January 1, 2029. Sections 19 and 20 of this bill authorize the Commissioner to take certain actions against a participant in the Program who commits certain violations or engages in any act or omission that the Commissioner determines is inconsistent with the health, safety or welfare of consumers or the public generally. Sections 3-8 of this bill define certain words and terms relating to the Program. Under existing law, with certain exceptions, insurers and certain rate service organizations are required to file with the Commissioner all rates and proposed increases thereto, as well as the forms of policies to which the rates apply, supplementary rate information and any changes or amendments to the rates. Existing law requires that such a filing be filed not less than 30 days before the proposed effective date of the filing, with certain exceptions. (NRS 686B.070) Existing law sets forth procedures by which the Commissioner is required to approve or disapprove a proposed increase or decrease in a rate for any kind or line of insurance, other than certain health plans. (NRS 686B.110) Sections 20.3 and 21 of this bill provide an alternative method by which certain insurers may make a filing for a proposed increase in a rate for certain types of insurance. Section 20.3 requires the Commissioner to establish a program of flex-rated filing to allow an insurer that issues certain lines of property insurance to make a filing for that line of insurance if the proposed increase does not exceed certain thresholds established by the Commissioner and certain other requirements are met. Section 20.3 sets forth certain requirements for making a filing for a proposed increase in a rate to qualify to be filed under the program of flex-rated filing. If the Commissioner finds, within 15 days after the filing is made, that the filing fails to meet such requirements, section 20.3 authorizes the Commissioner to treat the filing in the same manner as other proposed increases in a rate filed outside the program of flex-rated filing. If the Commissioner does not make such a determination within that time, the filing is deemed to be approved. Section 20.5 of this bill applies the definitions set forth under existing law governing rate filings to the provisions of section 20.3. Section 20.7 of this bill excludes property insurance for business and commercial risks from the provisions of section 20.3. Section 25.1 of this bill authorizes an insurer that issues a policy of property insurance to exclude the peril of wildfire from the coverage provided under the policy. Section 25.1 additionally authorizes an insurer to issue a policy of property insurance that solely covers the peril of wildfire. Existing law sets forth various requirements and restrictions for the operation of a reciprocal insurer. (Chapter 694B of NRS) Existing law sets forth certain rules that the Commissioner is required to apply in determining the financial condition of a reciprocal insurer, including rules concerning the computation of reserves. (NRS 694B.150) Section 25.3 of this bill revises those rules concerning reserves to require instead that the reserves of a reciprocal insurer be maintained as required by section 25.2 of this bill. Section 25.2 requires a reciprocal insurer at all times to maintain an unearned premium reserve in a certain amount and sets forth the manner in which that amount must be calculated. If, at any time, the amount of the unearned premium reserve maintained by a reciprocal insurer is less than $100,000, section 25.2 requires the reciprocal insurer to maintain cash or securities acceptable to the Commissioner in an amount that, when added to the amount of the unearned premium reserve maintained, equals not less than $100,000. Existing law provides for the licensure and regulation of captive insurers. (Chapter 694C of NRS) Section 25.5 of this bill removes provisions prohibiting a captive insurer from directly providing homeowners' insurance coverage. Section 25.5 authorizes an association captive insurer to insure the risks of individual homeowners who combine into an association for the purpose of procuring homeowners' insurance or the risks of individual units' owners in a common-interest community so long as the association captive insurer is owned by the association created by the homeowners or the unit-owners' association, as applicable. Sections 25.4 and 25.5 of this bill authorize a sponsored captive insurer to insure the risks of individual homeowners who elect to become a participant of a protected cell of a sponsored captive insurer. Existing law requires a unit-owners' association in a common-interest community to maintain certain insurance coverage, including property insurance on the common elements of the community. Existing law requires such property insurance for buildings with units divided by certain boundaries to include the units to the extent reasonably available. (NRS 116.3113) Section 25.6 of this bill provides that the requirement concerning the inclusion of the units in the property insurance coverage does not apply to property insurance maintained by an association which covers the peril of wildfire and which coordinates with or subrogates individual policies of property insurance maintained by the units' owners that cover the peril of wildfire.

Statutes affected:
As Introduced: 686B.070, 686B.100, 686B.110, 686B.112, 686B.117, 239.010
Reprint 1: 686B.020, 686B.030, 686B.070, 694B.150, 694C.113, 694C.300, 116.3113, 116.31133, 239.010
Reprint 2: 686B.020, 686B.030, 686B.070, 694B.150, 694C.113, 694C.300, 116.3113, 239.010
As Enrolled: 686B.020, 686B.030, 686B.070, 694B.150, 694C.113, 694C.300, 116.3113, 239.010
BDR: 686B.070, 686B.100, 686B.110, 686B.112, 686B.117, 239.010