Existing law prohibits an insurer from issuing or renewing a policy of liability insurance that contains a provision that: (1) reduces the limit of liability stated in the policy by the costs of defense, legal costs and fees and other expenses for claims; or (2) otherwise limits the availability of coverage for the costs of defense, legal costs and fees and other expenses for claims. (NRS 679A.210) Existing regulations provide that these prohibitions apply to a policy of casualty insurance that: (1) provides insurance against legal liability arising from the ownership or operation of a motor vehicle; (2) provides insurance against legal liability arising from the ownership of housing occupied by the owner of the housing; (3) is a policy of commercial general liability insurance; (4) is a policy of commercial automobile insurance; or (5) provides insurance covering the professional liability of certain providers of health care. Existing regulations also exempt from the applicability of the prohibitions: (1) a risk retention group; (2) captive insurance that does not cover third-party liability; and (3) a nonadmitted insurer. (Sections 2 and 3 of Adopted Reg. of Comm'r of Insurance, LCB File No. R029-23) Section 1 of this bill codifies those provisions of existing regulations into statute. Existing law provides for the regulation of insurance and insurers in this State by the Commissioner of Insurance. (Title 57 of NRS) Existing law establishes various kinds of insurance and prohibits the Commissioner from authorizing an insurer to transact in this State any kind of insurance other than the kinds of insurance established under existing law. (NRS 680A.080, 681A.010-681A.080) Among the various kinds of insurance established under existing law is casualty insurance, which existing law defines to include vehicle insurance, liability insurance, workers' compensation and employer's liability insurance and various other particular types of casualty insurance. (NRS 681A.020) Section 2 of this bill expands the definition of casualty insurance to include legal expenses insurance, which, under section 2, means insurance against any liability of a person or entity for the costs of any specific legal services or specific legal expenses and which pays or reimburses the person for the costs of the services or expenses. Section 2 excludes certain arrangements for prepaid legal services from the definition of legal expenses insurance. As such, under section 2, legal expenses insurance is included among the various types of insurance that a casualty insurer may be authorized to transact and subject to any applicable provision of existing law governing casualty insurance.

Statutes affected:
As Introduced: 681A.020
Reprint 1: 679A.210, 681A.020
As Enrolled: 679A.210, 681A.020
BDR: 681A.020