Bill Summary – FastDemocracy

LB93                                                                                          LB93
                                                                                        2023
                                   LEGISLATURE OF NEBRASKA
                              ONE HUNDRED EIGHTH LEGISLATURE
                                        FIRST SESSION
                         LEGISLATIVE BILL 93
       Introduced by Slama, 1.
       Read first time January 06, 2023
       Committee: Banking, Commerce and Insurance
   A BILL FOR AN ACT relating to insurance; to amend sections 44-319.02,
       44-319.03,    44-319.06,      and   44-3308,   Reissue Revised Statutes of
       Nebraska;     to change provisions relating to    security deposits
      required to    be deposited by    insurers with the Department of
      Insurance;    to harmonize provisions;    and to   repeal the original
      sections.
  Be it enacted by the people of the State of Nebraska,
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LB93                                                                                                  LB93
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         Section 1. Section 44-319.02, Reissue Revised Statutes of Nebraska,
   is amended to read:
         44-319.02 Every domestic insurer hereafter organized to transact the
  business of    insurance in    this state shall deposit and continually
   maintain with the Department of Insurance eligible securities for the
   benefit of all of its policyholders or policyholders and creditors in the
   United States in the amount of one hundred thousand dollars.
         Sec. 2. Section 44-319.03, Reissue Revised Statutes of Nebraska, is
   amended to read:
         44-319.03 Every domestic assessment association hereafter organized
  to transact the business of insurance in this state, except (1) health
   and accident assessment associations and    (2)    assessment associations
   organized primarily to    write insurance coverage on    farm properties
   against the perils of fire, lightning, windstorm, and hail, shall deposit
   with the Department of Insurance eligible securities for the benefit of
   all of its policyholders or policyholders and creditors in the United
   States equal to    one-fifth of   the minimum surplus funds required of
   domestic mutual insurance companies licensed to write the same kind or
   kinds of insurance.
         Sec. 3. Section 44-319.06, Reissue Revised Statutes of Nebraska, is
   amended to read:
         44-319.06    No foreign insurer or    assessment association now or
   hereafter authorized to    do business in    this state shall henceforth
   transact such business unless it shall deposit and continually maintain
   with the Department of Insurance or with the proper official of some one
   state of the United States designated by law to accept such deposit,
   eligible securities in the amount of not less than one hundred thousand
   dollars for the benefit of all of its policyholders or policyholders and
   creditors in the United States.
         Sec. 4. Section 44-3308, Reissue Revised Statutes of Nebraska, is
   amended to read:
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LB93                                                                                         LB93
                                                                                       2023
         44-3308 (1) An insurer whose purposes according to its articles of
   incorporation are restricted to transacting legal expense insurance and
   business reasonably related thereto shall deposit with the director
   securities eligible for deposit by an insurance company, which shall have
   at all times a market value of not less than one hundred fifty thousand
  dollars, or as provided by subsection (7) of this section. A deposit
   under this section shall be held to assure the faithful performance of
   the insurer's obligations to    its policyholders or   policyholders and
   creditors.
         (2) In lieu of any deposit of securities required under subsection
   (1) of this section, the insurer may file with the director a surety bond
   in the amount of one hundred fifty thousand dollars, or as provided by
   subsection (7) of this section. The bond shall be one issued by an
   insurance company authorized to do business in the State of Nebraska. The
   bond shall be for the same purposes as the deposit in lieu of which it is
   filed, and it shall be subject to the director's approval. No such bond
   shall be canceled or subject to cancellation unless at least thirty days'
   advance notice thereof, in writing, is filed with the director.
        (3) Securities or bond posted by the insurer pursuant to subsection
   (1) or (2) of this section shall be for the benefit of and subject to
   action thereon in the event of insolvency of the insurer by any person or
   persons sustaining an actionable injury due to the failure of the insurer
   to faithfully perform its obligations to    its policyholders or
   policyholders and creditors.
         (4) The State of Nebraska shall be responsible for the safekeeping
   of all securities deposited with the director under this section. The
   securities shall not, on account of being in this state, be subject to
   taxation.
         (5) The depositing insurer shall, during its solvency, have the
   right to exchange or substitute other securities of a like quality and
  value for securities on deposit, to receive the interest and other income
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LB93                                                                                       LB93
                                                                                     2023
  accruing on such securities, and to inspect the deposit at all reasonable
  times.
         (6) The deposit or bond shall be maintained unimpaired as long as
  the insurer continues in business in this state. Whenever the insurer
  ceases to do business and furnishes to the director proof satisfactory to
   the director that the insurer adequately provided for all of   its
  obligations to its policyholders, creditors, or contract holders in this
  state, the director shall release the deposited securities to the parties
   entitled thereto, on presentation of the director's receipts for such
  securities, or shall release any bond filed with it in lieu of such
  deposit.
         (7) The director may reduce the minimum market value of securities
   required under subsection (1) of this section or the amount of the surety
  bond required under subsection (2) of this section if he or she finds
  that the reduction is justified by:
        (a) The terms and number of existing contracts with subscribers;
        (b) Support by financially sound public or private organizations or
  agencies;
         (c) Agreements with lawyers or paralegal personnel for the providing
   of legal services;
        (d) Agreements with other persons for insuring the payment of the
  cost of legal services or the provision for alternative coverage in the
  event the insurer is unable to perform its obligations; or
        (e) Other reliable financial guarantees.
         (8) No part of the securities or bond to be filed under this section
  shall be supplied directly or indirectly by dues payments made for the
  purpose of meeting requirements to practice a profession.
        Sec.   5.   Original sections    44-319.02,   44-319.03,   44-319.06,     and
  44-3308, Reissue Revised Statutes of Nebraska, are repealed.
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Statutes affected: 
Introduced: 44-319.02, 44-319.03, 44-319.06, 44-3308