[Rev. 11/21/2013 1:16:09
PM--2013]
CHAPTER 692B - FORMATION AND
CAPITALIZATION OF DOMESTIC STOCK AND MUTUAL INSURERS; FINANCING OF INSURERS AND
HOLDING COMPANIES
NRS 692B.010 Scope.
NRS 692B.020 Incorporation.
NRS 692B.030 Amendment
of articles of incorporation; approval of Commissioner; applicability to
existing insurers.
NRS 692B.040 Solicitation
permit required; penalty.
NRS 692B.050 “Insurance
holding corporation” defined; Massachusetts trusts.
NRS 692B.060 Exemptions.
NRS 692B.070 Application
for solicitation permit. [Effective until the date of the repeal of 42 U.S.C. §
666, the federal law requiring each state to establish procedures for
withholding, suspending and restricting the professional, occupational and
recreational licenses for child support arrearages and for noncompliance with
certain processes relating to paternity or child support proceedings.]
NRS 692B.070 Application
for solicitation permit. [Effective on the date of the repeal of 42 U.S.C. §
666, the federal law requiring each state to establish procedures for
withholding, suspending and restricting the professional, occupational and
recreational licenses for child support arrearages and for noncompliance with
certain processes relating to paternity or child support proceedings.]
NRS 692B.080 Application
for permit to solicit qualifying mutual applications.
NRS 692B.090 Investigation.
NRS 692B.100 Granting
or denial of permit.
NRS 692B.110 Terms
of permit; compliance.
NRS 692B.120 Permit
as inducement.
NRS 692B.130 Prospectus
required; contents of prospectus; other literature; filing of certain sales
literature and visual sales material with Commissioner.
NRS 692B.140 Modification
or revocation of permit.
NRS 692B.150 Bond;
deposit in lieu of bond; waiver or release.
NRS 692B.160 Rights
under permit.
NRS 692B.170 Deposit
of money in escrow.
NRS 692B.180 Subscription
contracts.
NRS 692B.190 License
to sell securities. [Effective until the date of the repeal of 42 U.S.C. § 666,
the federal law requiring each state to establish procedures for withholding,
suspending and restricting the professional, occupational and recreational
licenses for child support arrearages and for noncompliance with certain
processes relating to paternity or child support proceedings.]
NRS 692B.190 License
to sell securities. [Effective on the date of the repeal of 42 U.S.C. § 666,
the federal law requiring each state to establish procedures for withholding,
suspending and restricting the professional, occupational and recreational
licenses for child support arrearages and for noncompliance with certain
processes relating to paternity or child support proceedings.]
NRS 692B.193 Payment
of child support: Statement by applicant for permit or license; grounds for
denial of permit or license; duty of Commissioner. [Effective until the date of
the repeal of 42 U.S.C. § 666, the federal law requiring each state to
establish procedures for withholding, suspending and restricting the
professional, occupational and recreational licenses for child support
arrearages and for noncompliance with certain processes relating to paternity
or child support proceedings.]
NRS 692B.197 Suspension
of permit or license for failure to pay child support or comply with certain
subpoenas or warrants; reinstatement of permit or license. [Effective until the
date of the repeal of 42 U.S.C. § 666, the federal law requiring each state to
establish procedures for withholding, suspending and restricting the
professional, occupational and recreational licenses for child support
arrearages and for noncompliance with certain processes relating to paternity
or child support proceedings.]
NRS 692B.200 Mutual
insurers: Initial qualifications.
NRS 692B.210 Mutual
insurers: Permit; bond or deposit.
NRS 692B.220 Mutual
insurers: Qualifying applications for insurance.
NRS 692B.230 Mutual
insurers: Deposit of premiums in escrow.
NRS 692B.240 Failure
to complete or qualify.
NRS 692B.250 Voluntary
dissolution.
NRS 692B.260 Subsequent
financing: Solicitation permit required; penalty.
_________
_________
NRS 692B.010 Scope. This chapter
applies to the formation, after January 1, 1972, of domestic stock and mutual
insurers, to the capitalization of domestic stock insurers, and to the
financing of domestic insurers of all types and of insurance holding
corporations thereof.
(Added to NRS by 1971, 1782)
NRS 692B.020 Incorporation.
1. The general corporation laws of this
state govern the incorporation of domestic stock and mutual insurers formed
after January 1, 1972, where not in conflict with the express provisions of
this Code. In case of such conflict the express provisions of this Code govern.
2. A domestic insurer must be incorporated
by not less than three natural persons. The articles of incorporation must set
forth the name and residence address of each of the true incorporators, and
dummy incorporators must not be used.
3. The articles of incorporation must also
set forth:
(a) The names and addresses of each proposed
director or officer who is not an incorporator;
(b) The kind or kinds of insurance proposed to be
transacted, in accordance with the definitions thereof contained in NRS 681A.010 to 681A.080, inclusive;
(c) If to be a stock insurer, the amount of
authorized capital, the number of shares into which divided, and the par value
of each share, which par value must not be less than $1. Shares without nominal
or par value must not be authorized. All authorized shares must be of one
class, with one vote per outstanding share and equal rights between outstanding
shares as to dividends and distributions, and in all other respects; and
(d) If to be a mutual insurer, the contingent
liability of policyholders for payment of losses and expenses of the insurer,
which liability must not be less than one or more than six times the
policyholder’s premium at the annual rate for a term of 1 year, as specified in
the articles of incorporation. Such contingent liability may be rendered
inoperative pursuant to the provisions of NRS
693A.250.
4. The articles of incorporation of a
proposed stock insurer must require that all shares be issued at a price not
less than par value, and must not provide for stock options.
(Added to NRS by 1971, 1782; A 1991, 2204)
NRS 692B.030 Amendment of articles of incorporation; approval of
Commissioner; applicability to existing insurers.
1. An amendment of articles of incorporation
of a domestic insurer shall not be filed or accepted for filing with the
Secretary of State unless first submitted to and approved by the Commissioner.
2. The insurer shall deliver executed
quadruplicate originals of the proposed articles of amendment to the
Commissioner. If the Commissioner finds the same to be in accordance with law,
the Commissioner shall endorse his or her approval on each set of the articles
of amendment and return the same to the insurer. The insurer shall then file
the original set with the Secretary of State, one set with the Commissioner,
and otherwise as required by law. If the Commissioner does not so find, the
Commissioner shall not approve the proposed articles of amendment, but shall
return all sets to the insurer together with a written statement of the reasons
for nonapproval.
3. After January 1, 1972, no existing
domestic stock or mutual insurer shall amend its articles of incorporation in
any way which would conflict with the requirements of this Code as to a newly
formed similar domestic insurer; but an existing domestic stock insurer with
preferred stock already as part of its authorized capital shall have the right
to increase or decrease the amount of the same or modify the rights and
priorities thereof as otherwise permitted by law.
(Added to NRS by 1971, 1783)
NRS 692B.040 Solicitation permit required; penalty.
1. A person forming or proposing to form a
domestic insurer, or insurance holding corporation thereof, or corporation to
be attorney-in-fact for a domestic reciprocal insurer, or proposing to secure
funds for the formation or financing of a domestic insurer, or production of
insurance business therefor, or for an insurance holding corporation holding or
proposing to hold securities of a domestic insurer, or for an attorney-in-fact
corporation of a domestic reciprocal insurer, or for the formation or financing
of a syndicate, association, firm, partnership or organization for any such
purposes, shall not in this state advertise or offer for sale any securities or
policies, or solicit or receive any funds, subscriptions, applications,
premiums or memberships, except as authorized by a currently effective permit,
in this chapter sometimes referred to as a “solicitation permit,” issued by the
Commissioner.
2. A person who violates the provisions of
this section is guilty of a category D felony and shall be punished as provided
in NRS 193.130.
(Added to NRS by 1971, 1783; A 1979, 1492; 1995, 1319)
NRS 692B.050 “Insurance holding corporation” defined; Massachusetts trusts.
1. As used in this Code, an insurance
holding corporation is a corporation, whether or not incorporated under the
laws of this state, owning or holding, or proposing to own or hold, a
controlling stock interest in a domestic stock insurer. Shares owned directly
or indirectly by the corporation or by its subsidiary or affiliate corporation,
firm or organization, or by its officers, directors or principal stockholders,
shall be deemed to be owned or held by the corporation for the purposes of this
section.
2. For the purposes of this chapter that
type of organization known as a “Massachusetts trust” shall be deemed to be a
corporation.
(Added to NRS by 1971, 1784)
NRS 692B.060 Exemptions. NRS 692B.040 does not apply to:
1. Sales of securities not involving a
public offering, and under a plan filed with and not disapproved by the
Commissioner; that is, sales on which no commission or other compensation is
payable resulting from offers privately made to not over 20 persons (other than
banks, savings associations, investment companies registered as such under the
Investment Company Act of 1940, registered securities dealers, investment
houses and other financial institutions) within a 12-month period, and where
all persons (including such banks, associations, companies, dealers, houses and
institutions) so acquiring such securities do so for investment purposes only
and not with a view to further distribution. The Commissioner shall disapprove
any such plan within 10 days after filing, or within such reasonable additional
period as the Commissioner may request within such 10 days, if found by the
Commissioner to be:
(a) Unfair to any existing or proposed other
holders of securities of the insurer; or
(b) Unlawful.
2. Sales of securities by an insurance
holding corporation for purposes which do not include the financing, directly
or indirectly, of a domestic insurer.
3. Stock of the insurer or insurance
holding corporation to be offered and sold (without payment of commission
thereon) exclusively to directors, employees and agents of the insurer or
corporation, or any of them, under stock options granted pursuant to a written
lawful plan therefor adopted by the board of directors, approved by a majority
of the stock of the issuer corporation having voting rights, and filed with and
approved by the Commissioner. The Commissioner shall approve such a plan unless
found by the Commissioner to be inequitable to other personnel of the insurer
or other persons financially interested in the insurer.
4. Securities issued or proposed to be
issued pursuant to any merger, consolidation, bulk reinsurance, conversion,
mutualization or corporate affiliation approved by the Commissioner pursuant to
chapter 693A of NRS.
5. Securities issued in exchange for
outstanding securities of the issuer, or partly in exchange for such
outstanding securities and partly for cash, in connection with a recapitalization
of the issuer or the exercise of conversion or exchange rights under such
outstanding securities.
6. Securities issued and distributed to
existing holders of securities of the insurer as a dividend paid in securities.
7. Fractional share interests in stock of
the issuer offered and sold for the purpose of rounding out to whole shares in
connection with any stock dividend or other distribution of shares to existing
security holders of the issuer.
(Added to NRS by 1971, 1784)
NRS 692B.070 Application for solicitation permit. [Effective until the date
of the repeal of 42 U.S.C. § 666, the federal law requiring each state to
establish procedures for withholding, suspending and restricting the
professional, occupational and recreational licenses for child support
arrearages and for noncompliance with certain processes relating to paternity
or child support proceedings.]
1. A written application for any permit
required under NRS 692B.040 must be filed with the
Commissioner. The application must include or be accompanied by:
(a) The name, type and purposes of the insurer,
corporation, syndicate, association, firm or organization formed or proposed to
be formed or financed;
(b) On forms furnished by the Commissioner, for
each person associated or to be associated as incorporator, director, promoter,
manager or in other similar capacity in the enterprise, or in the formation of
the proposed insurer, corporation, syndicate, association, firm or
organization, or in the proposed financing:
(1) The person’s name, residential address
and qualifications; and
(2) The person’s business background and
experience for the preceding 10 years;
(c) A full disclosure of the terms of all
pertinent understandings and agreements existing or proposed among any persons
or entities so associated or to be associated, and a copy of each such
agreement;
(d) Executed quadruplicate originals of the
articles of incorporation of a proposed domestic stock or mutual insurer;
(e) The original and one copy of the proposed
bylaws of a proposed domestic stock or mutual insurer;
(f) The plan according to which solicitations are
to be made and a reasonably detailed estimate of all organization and sales
expenses to be incurred in the proposed organization and offering;
(g) A copy of any security, receipt or
certificate proposed to be offered, and a copy of any proposed subscription
agreement or application therefor;
(h) A copy of any prospectus, offering circular,
advertising or sales literature or material proposed to be used;
(i) A copy of the proposed form of any escrow
agreement required;
(j) A copy of:
(1) The articles of incorporation of any
corporation, other than a proposed domestic insurer, proposing to offer its
securities, certified by the public officer having custody of the original
thereof;
(2) Any syndicate, association, firm,
organization or other similar agreement, by whatever name called, if funds for
any of the purposes referred to in subsection 1 of NRS
692B.040 are to be secured through the sale of any security, interest or
right in or relative to such syndicate, association, firm or organization; and
(3) If the insurer is, or is to be, a
reciprocal insurer, the power of attorney and of other agreements existing or
proposed affecting subscribers, investors, the attorney-in-fact or the insurer;
(k) If the applicant is a natural person, the
statement required pursuant to NRS 692B.193; and
(l) Such additional pertinent information as the
Commissioner may reasonably require.
2. The application must be accompanied by
a deposit of the fees required under NRS
680B.010 for the filing of the application and for issuance of the permit,
if granted.
3. If the applicant is a natural person,
the application must include the social security number of the applicant.
4. In lieu of a special filing thereof of
information required by subsection 1, the Commissioner may accept a copy of any
pertinent filing made with the Securities and Exchange Commission relative to
the same offering.
5. Each person identified in paragraph (b)
of subsection 1 who is a resident of this State must, as part of his or her
application and at the person’s own expense:
(a) Arrange to have a complete set of his or her
fingerprints taken by a law enforcement agency or other authorized entity
acceptable to the Commissioner; and
(b) Submit to the Commissioner:
(1) A completed fingerprint card and
written permission authorizing the Commissioner to submit the person’s
fingerprints to the Central Repository for Nevada Records of Criminal History
for submission to the Federal Bureau of Investigation for a report on the
person’s background and to such other law enforcement agencies as the
Commissioner deems necessary; or
(2) Written verification, on a form
prescribed by the Commissioner, stating that the fingerprints of the person
were taken and directly forwarded electronically or by another means to the
Central Repository and that the person has given written permission to the law
enforcement agency or other authorized entity taking the fingerprints to submit
the fingerprints to the Central Repository for submission to the Federal Bureau
of Investigation for a report on the person’s background and to such other law
enforcement agencies as the Commissioner deems necessary.
6. The Commissioner may:
(a) Unless the person’s fingerprints are directly
forwarded pursuant to subparagraph (2) of paragraph (b) of subsection 5, submit
those fingerprints to the Central Repository for submission to the Federal
Bureau of Investigation and to such other law enforcement agencies as the
Commissioner deems necessary; and
(b) Request from each such agency any information
regarding the person’s background as the Commissioner deems necessary.
(Added to NRS by 1971, 1785; A 1997, 2203; 1999, 520, 543; 2003, 2870; 2011, 3389;
2013, 3837)
NRS 692B.070 Application for
solicitation permit. [Effective on the date of the repeal of 42 U.S.C. § 666,
the federal law requiring each state to establish procedures for withholding,
suspending and restricting the professional, occupational and recreational
licenses for child support arrearages and for noncompliance with certain
processes relating to paternity or child support proceedings.]
1. A written application for any permit
required under NRS 692B.040 must be filed with the
Commissioner. The application must include or be accompanied by:
(a) The name, type and purposes of the insurer,
corporation, syndicate, association, firm or organization formed or proposed to
be formed or financed;
(b) On forms furnished by the Commissioner, for
each person associated or to be associated as incorporator, director, promoter,
manager or in other similar capacity in the enterprise, or in the formation of
the proposed insurer, corporation, syndicate, association, firm or
organization, or in the proposed financing:
(1) The person’s name, residential address
and qualifications; and
(2) The person’s business background and
experience for the preceding 10 years;
(c) A full disclosure of the terms of all
pertinent understandings and agreements existing or proposed among any persons
or entities so associated or to be associated, and a copy of each such
agreement;
(d) Executed quadruplicate originals of the
articles of incorporation of a proposed domestic stock or mutual insurer;
(e) The original and one copy of the proposed
bylaws of a proposed domestic stock or mutual insurer;
(f) The plan according to which solicitations are
to be made and a reasonably detailed estimate of all organization and sales
expenses to be incurred in the proposed organization and offering;
(g) A copy of any security, receipt or
certificate proposed to be offered, and a copy of any proposed subscription
agreement or application therefor;
(h) A copy of any prospectus, offering circular,
advertising or sales literature or material proposed to be used;
(i) A copy of the proposed form of any escrow
agreement required;
(j) A copy of:
(1) The articles of incorporation of any
corporation, other than a proposed domestic insurer, proposing to offer its
securities, certified by the public officer having custody of the original
thereof;
(2) Any syndicate, association, firm,
organization or other similar agreement, by whatever name called, if funds for
any of the purposes referred to in subsection 1 of NRS
692B.040 are to be secured through the sale of any security, interest or
right in or relative to such syndicate, association, firm or organization; and
(3) If the insurer is, or is to be, a
reciprocal insurer, the power of attorney and of other agreements existing or
proposed affecting subscribers, investors, the attorney-in-fact or the insurer;
and
(k) Such additional pertinent information as the
Commissioner may reasonably require.
2. The application must be accompanied by
a deposit of the fees required under NRS
680B.010 for the filing of the application and for issuance of the permit,
if granted.
3. In lieu of a special filing thereof of
information required by subsection 1, the Commissioner may accept a copy of any
pertinent filing made with the Securities and Exchange Commission relative to
the same offering.
4. Each person identified in paragraph (b)
of subsection 1 who is a resident of this State must, as part of his or her
application and at the person’s own expense:
(a) Arrange to have a complete set of his or her
fingerprints taken by a law enforcement agency or other authorized entity
acceptable to the Commissioner; and
(b) Submit to the Commissioner:
(1) A completed fingerprint card and
written permission authorizing the Commissioner to submit the person’s
fingerprints to the Central Repository for Nevada Records of Criminal History
for submission to the Federal Bureau of Investigation for a report on the
person’s background and to such other law enforcement agencies as the
Commissioner deems necessary; or
(2) Written verification, on a form
prescribed by the Commissioner, stating that the fingerprints of the person
were taken and directly forwarded electronically or by another means to the
Central Repository and that the person has given written permission to the law
enforcement agency or other authorized entity taking the fingerprints to submit
the fingerprints to the Central Repository for submission to the Federal Bureau
of Investigation for a report on the person’s background and to such other law
enforcement agencies as the Commissioner deems necessary.
5. The Commissioner may:
(a) Unless the person’s fingerprints are directly
forwarded pursuant to subparagraph (2) of paragraph (b) of subsection 4, submit
those fingerprints to the Central Repository for submission to the Federal
Bureau of Investigation and to such other law enforcement agencies as the
Commissioner deems necessary; and
(b) Request from each such agency any information
regarding the person’s background as the Commissioner deems necessary.
(Added to NRS by 1971, 1785; A 1997, 2203; 1999, 520, 543; 2003, 2870; 2011, 3389;
2013, 3837,
effective on the date of the repeal of 42 U.S.C. § 666, the federal law
requiring each state to establish procedures for withholding, suspending and
restricting the professional, occupational and recreational licenses for child
support arrearages and for noncompliance with certain processes relating to
paternity or child support proceedings)
NRS 692B.080 Application for permit to solicit qualifying mutual
applications. Written application
for any permit required under NRS 692B.040 in
connection with the formation of a domestic mutual insurer by the securing of
qualifying applications for insurance as provided in NRS
692B.200 shall be filed with the Commissioner. The application shall
contain such information and be accompanied by such of the documents and the
fees required under NRS 692B.070 as may be
applicable, and in addition shall be accompanied by:
1. A copy of each policy for which
applications are proposed to be solicited;
2. A copy of the proposed insurance
application form, consistent with the requirements of NRS
692B.220 (qualifying applications for insurance); and
3. A schedule of the premiums or premium
rates proposed to be charged in connection with such insurance applications.
(Added to NRS by 1971, 1786)
NRS 692B.090 Investigation.
1. Upon completion of the application for
a permit under NRS 692B.070 and 692B.080, the Commissioner shall promptly cause an
investigation to be made of:
(a) The identity, character, reputation,
experience, financial standing and motives of the persons proposing to
organize, promote or finance the insurer or organization;
(b) The character, financial responsibility,
insurance management experience and business qualifications of the officers,
directors and managers of the insurer or organization existing or proposed; and
(c) Such other aspects of the insurer,
organization or proposed financing as the Commissioner deems advisable.
2. The Commissioner may, in the
Commissioner’s discretion, waive investigation with respect to the further
financing of a domestic insurer already duly authorized to transact insurance
in this state.
(Added to NRS by 1971, 1786)
NRS 692B.100 Granting or denial of permit.
1. The Commissioner shall expeditiously
examine an application for a solicitation permit and complete the investigation
as called for. Subject to subsection 2, if the Commissioner finds on such
examination and investigation that:
(a) The application is complete;
(b) The documents therewith filed are proper in
form; and
(c) The proposed financing is reasonable and
adequate in amount for the purposes intended and the applicant is otherwise
entitled to the permit,
Ê the
Commissioner shall give notice to the applicant that the Commissioner will
issue the permit upon the filing of any bond required by NRS 692B.150 or 692B.210,
or deposit in lieu thereof, and the filing of an executed copy of any escrow
agreement required in connection therewith. If quadruplicate executed originals
of articles of incorporation of a proposed domestic stock or mutual insurer
have been filed with the Commissioner as required under paragraph (d) of
subsection 1 of NRS 692B.070, the Commissioner
shall inscribe the approval of the Commissioner on each copy thereof and return
them to the applicant for filing with the Secretary of State and otherwise as
required by law.
2. If the Commissioner does not so find,
or finds that:
(a) The proposed sale of securities would be or
tend to be unfair or inequitable as to present or proposed security holders or
investors;
(b) Any of the individuals associated or to be
associated in the insurer, corporation, syndicate, association, firm,
organization or financing are not of good reputation as to business affairs or
financial responsibility;
(c) The proposed insurer would not be able to
qualify for a certificate of authority in this state by virtue of the
provisions of subsection 2 of NRS
680A.090 (ownership, management);
(d) If an insurance holding corporation, its plan
of capitalization or security options, or financing are such as would be
prohibited under this Code as to a newly formed domestic stock insurer; or
(e) There is material variance, adverse to the
applicant, as between the information furnished by the applicant in connection
with the application and that determined by the Commissioner on investigation,
Ê the
Commissioner shall give notice to the applicant that a permit will not be
granted, stating the particulars of the grounds for such denial, and refund to
the applicant all sums deposited in connection with the application other than
the fee for the filing of the application.
(Added to NRS by 1971, 1787)
NRS 692B.110 Terms of permit; compliance.
1. Upon filing any bond (or making the
deposit in lieu of bond) required under NRS 692B.150
or 692B.210, and upon filing with the Commissioner
an executed copy of any required escrow agreement, the Commissioner shall issue
a permit to the applicant if the applicant is entitled thereto under NRS 692B.100.
2. Every such permit shall contain
provisions, as applicable, as follows:
(a) It shall state the securities which are to be
offered, the number and selling price; or identify the insurance policy or
policies for which applications are to be solicited in the case of the
formation of a new domestic mutual insurer.
(b) It shall require that all premiums and the
purchase price of securities shall be payable only in lawful money of the
United States of America, or, in the case of sale of securities, in such other
securities as may be specified by class or description in the permit.
(c) It shall require that all securities to be
offered or sold shall be so offered and sold at the same price to all parties,
subject, at the option of the issuer in the case of subscriptions to be paid in
installments, to a reasonable additional charge to cover expenses and loss of
interest earnings attributable to such installment subscriptions.
(d) It shall limit the portion of funds received
on account of the sale of securities under the permit which may be used for
organization, securities sales and promotion expenses to such amount as the
Commissioner deems reasonably adequate under the proposed plan of solicitation,
but in no event to exceed 15 percent of such funds as and when the funds are
actually received.
(e) If the Commissioner believes the same
desirable for the protection of the public or for any other reasonable purpose,
the permit may:
(1) Require the founders, promoters,
incorporators or other persons directly involved in the proposed offering, to
subscribe and pay for immediately and in cash, at the proposed public offering
price, a reasonable proportion of the same securities as proposed to be offered
under the permit.
(2) Prohibit, limit or control the
granting of options, to such founders, promoters, incorporators or other
persons, to buy the securities.
(3) Prohibit, by any founder, promoter,
incorporator or other person associated or to be associated under the permit,
the resale or transfer for a period terminating 1 year after expiration or other
termination of the permit, of his or her interest in any security, right or
interest of the kind proposed to be offered under the permit, or of any other
security, interest or right which he or she may have in or as to the same
issuing entity, or the granting of any option or lien as to any such security,
right or interest. The Commissioner may, in the discretion of the Commissioner,
require that any security, right or interest the resale or transfer of which is
prohibited in this subparagraph, shall be deposited and held in escrow for the
prescribed period. This subparagraph does not prohibit the sale or transfer of
any such security, right or interest by the personal representative of a
deceased founder, promoter or incorporator, or of any other deceased person
associated under the permit.
(4) Contain other reasonable provisions.
(f) If the permit is issued in connection with
the solicitation of qualifying applications for insurance policies of a
proposed mutual insurer, it shall limit the portion of funds received therefor
which may be used for organization and sales expense to a reasonable commission
related to the kind of insurance policy involved, and provide that no such
commissions shall be deemed earned or be paid until the insurer has received
its certificate of authority and the policies so applied for have been actually
issued, delivered to and accepted by the respective insureds.
(g) The permit shall expire at the expiration of
a period stated therein, which period shall be not more than 2 years after its
date of issue, unless earlier terminated by the Commissioner, but subject to
the right of the Commissioner, for good cause shown, to grant an extension for
an additional reasonable period.
(h) The permit shall contain such other
reasonable conditions relative to accounting, reports, deposits and other
matters consistent with this chapter as the Commissioner deems advisable for
the protection of existing or prospective investors or policyholders.
3. The holder of the permit, and its
directors, officers, employees, agents, founders, promoters, incorporators and
representatives shall comply with the terms of the permit.
(Added to NRS by 1971, 1787)
NRS 692B.120 Permit as inducement.
1. The granting of a solicitation permit
is permissive only and shall not constitute an endorsement by the Commissioner
of any person or thing related to any such insurer, corporation, syndicate,
association, firm, organization or financing, or constitute evidence of the
completeness or accuracy of information presented in any prospectus or other
sales literature. The existence of the permit shall not be advertised or used
as an inducement in any solicitation.
2. The Commissioner shall place the
substance of this section in conspicuous type at the top of each such permit
issued.
(Added to NRS by 1971, 1789)
NRS 692B.130 Prospectus required; contents of prospectus; other literature;
filing of certain sales literature and visual sales material with Commissioner.
1. An offering of securities, or of
insurance policies (in case of qualifying applications for insurance in the
formation of a domestic mutual insurer), shall be made only by a written
prospectus as filed with the Commissioner and delivered to the prospective
investor or policyholder.
2. The prospectus shall disclose all facts
relative to the issuer and the offered security or policy which are reasonably
material thereto, and shall not omit a material fact necessary to make the
statements made, in the light of the circumstances under which made, not
misleading. The Commissioner may make reasonable rules and regulations
concerning the form and contents of prospectuses, not inconsistent with the
provisions of this Code.
3. The Commissioner may accept, as a
compliance with this section, a prospectus or offering circular covering
securities to be offered in this state under an existing registration thereof
with the Securities and Exchange Commission or under an existing exemption from
such registration pursuant to Regulation A of the general rules and regulations
of the Securities and Exchange Commission under the Securities Act of 1933, as
amended.
4. As to securities covered by a
solicitation permit, no sales literature or visual sales material other than
the prospectus or offering circular shall be used in solicitations unless a
copy thereof has been filed with the Commissioner in advance of such use and
not disapproved by the Commissioner in writing mailed or delivered to the
filing party within 10 days after the date of such filing. The Commissioner
shall disapprove any such literature or material found by the Commissioner to
be untrue or misleading. This subsection does not modify or affect any
applicable requirement or prohibition under or pursuant to the Securities Act
of 1933, as amended.
(Added to NRS by 1971, 1789)
NRS 692B.140 Modification or revocation of permit. The
Commissioner may for cause modify a solicitation permit theretofore issued; and
may after a hearing thereon revoke the permit for a violation of law or the
terms of the permit, of any proper order of the Commissioner, or for material
misrepresentation in the offering or sale of securities or policies under the
permit.
(Added to NRS by 1971, 1790)
NRS 692B.150 Bond; deposit in lieu of bond; waiver or release.
1. Except as otherwise provided in this
section, the Commissioner shall not issue a solicitation permit until the
applicant has filed with the Commissioner a bond in favor of the State of Nevada,
in the penal sum of $50,000 and issued by a surety insurer authorized to
transact such insurance in this state.
2. The bond shall be conditioned upon:
(a) The payment of costs incurred by the State of
Nevada in the event of any proceeding for liquidation or dissolution of the
proposed organization before completion or organization, or, if to be an
insurer, a certificate of authority is not granted;
(b) Compliance with terms of the permit and with
applicable laws of this state; and
(c) A full accounting for all funds received in
transactions under the permit until the proposed insurer has been granted its
certificate of authority or until the corporation, syndicate, association, firm
or organization or financing has been completed within the terms of the permit.
3. In lieu of filing such a bond the
applicant may deposit with the Commissioner cash in the amount of $50,000 or
securities of the United States Government or of the State of Nevada in market
value of at least $50,000, and the Commissioner shall hold such deposit in
trust for the same purposes as apply to a bond under subsection 2. The amount
so deposited may, in the Commissioner’s discretion, be credited toward payment
of subscriptions to securities by founders, promoters and incorporators if
required under subparagraph (1) of paragraph (e) of subsection 2 of NRS 692B.110, (terms of permit) but subject to such
diminution of such credit as may result from actual application of the deposit
to the purposes for which made.
4. The Commissioner may, in the discretion
of the Commissioner, waive the requirement for a bond or deposit in lieu
thereof if the securities are to be issued in connection with subsequent
financing as provided for in NRS 692B.260.
5. The Commissioner shall release and
discharge the bond or deposit or remaining portion thereof held under this
section upon settlement of all liabilities, if any, against it.
6. This section does not apply to
solicitation of initial qualifying applications for insurance in a proposed
domestic mutual insurer pursuant to NRS 692B.200
except as provided in NRS 692B.210.
(Added to NRS by 1971, 1790)
NRS 692B.160 Rights under permit. Upon
issuance to it by the Commissioner of its solicitation permit, a newly formed
proposed domestic stock or mutual insurer shall file with the Commissioner a
copy of its articles of incorporation as filed with the Secretary of State and
proceed to the offer and sale of its securities and insurance policies as
provided for in the permit.
(Added to NRS by 1971, 1791)
NRS 692B.170 Deposit of money in escrow.
1. The holder of the solicitation permit
shall promptly deposit all money except as provided in paragraph (a) of
subsection 2, received from an offering of securities in this state pursuant to
the permit, other than advance premiums for insurance which are subject to NRS 692B.230, in escrow in a bank, credit union or
trust company located in this state and under an agreement consistent with this
chapter filed with and approved by the Commissioner.
2. No part of the money may be withdrawn
from the deposit, except:
(a) For payment of organization, sales and
promotion expenses as earned and as authorized by the permit, and money for
such purposes, up to the applicable expense limit on money as received, may be
withheld from the deposit;
(b) For the purpose of making any deposit with
the Commissioner required for the issuance of a certificate of authority to an
insurer, or if the organization is not, or is not to be, an insurer, upon
completion of payments on securities subscriptions made under the permit and
deposit or appropriation of such money to the purposes specified in the permit;
or
(c) For the making of refunds as provided in NRS 692B.240.
3. Money while so held in escrow may be
invested in certificates of deposit or savings accounts. Interest accruing
thereon becomes part of the money released as provided in paragraph (b) of
subsection 2, or must be applied toward the cost of making refunds under
paragraph (c) of subsection 2, or to supplement the bond or deposit in lieu
thereof if the bond or deposit is called on pursuant to NRS
692B.150.
4. When the Commissioner has issued a
certificate of authority to a proposed insurer the Commissioner shall release
to the insurer any money remaining in escrow for its account.
5. The Commissioner may in the discretion of
the Commissioner waive compliance with this section as to money to be received
under a subsequent financing permit pursuant to NRS
692B.260, or in other circumstances where the Commissioner deems such an
escrow to be unnecessary for the protection of investors or the public.
(Added to NRS by 1971, 1791; A 1999, 1553)
NRS 692B.180 Subscription contracts.
1. No form of subscription contract to
sell securities under a solicitation permit shall be used unless the form has
been filed with the Commissioner not less than 10 days prior to use and not
disapproved by the Commissioner. The Commissioner shall disapprove any such
form found by the Commissioner, either within or after such 10-day period, to
be:
(a) Prolix or unduly complicated as to terms;
(b) In any material part, printed in such a
manner as to be difficult to read;
(c) Unfair to the subscriber in its terms; or
(d) Contrary to law or the terms of the
solicitation permit.
2. No such disapproval shall be
retroactively effective.
3. Every such contract providing for
payment of the subscription price in installments shall:
(a) Require payment in full prior to expiration
of the permit; and
(b) Provide for the forfeiture, at the option of
the corporation, of all payments theretofore made if the subscriber fails to
cure all delinquencies of payments thereunder within 45 days after written
notice of such delinquencies and of such forfeiture requirement has been mailed
by the permit holder to the subscriber at his or her address last of record
with the permit holder.
(Added to NRS by 1971, 1791)
NRS 692B.190 License to sell securities. [Effective until the date of the
repeal of 42 U.S.C. § 666, the federal law requiring each state to establish
procedures for withholding, suspending and restricting the professional,
occupational and recreational licenses for child support arrearages and for
noncompliance with certain processes relating to paternity or child support
proceedings.]
1. No person may in this State solicit
subscription to or purchase of any security covered by a solicitation permit
issued under this chapter, unless then licensed therefor by the Commissioner.
2. Such a license may be issued only to
natural persons, and the Commissioner shall not license any person found by the
Commissioner to be:
(a) Dishonest or untrustworthy;
(b) Financially irresponsible;
(c) Of unfavorable personal or business history
or reputation; or
(d) For any other cause, reasonably unsuited for
fulfillment of the responsibilities of such a licensee.
3. The applicant for such a license must
file a written application therefor with the Commissioner, on forms and
containing inquiries as designated and required by the Commissioner. The
application must include or be accompanied by:
(a) The social security number of the applicant;
(b) An endorsement by the holder of the permit
under which the securities are proposed to be sold; and
(c) The application fee specified in NRS 680B.010.
4. The Commissioner shall promptly cause
an investigation to be made of the identity and qualifications of the
applicant.
5. The license, if issued, must be for the
period of the permit, and must automatically be extended if the permit is
extended.
6. The Commissioner shall revoke the
license if at any time after issuance the Commissioner has found that the
license was obtained through misrepresentation or concealment of facts, or that
the licensee is no longer qualified therefor, or that the licensee has
misrepresented the securities offered, or has otherwise conducted himself or
herself in or with respect to transactions under the license in a manner
injurious to the permit holder or to subscribers or prospects or the public.
7. This section does not apply to
securities broker-dealers registered as such under the Securities Exchange Act
of 1934, or with respect to securities the sale of which is underwritten, other
than on a best efforts basis, by such a broker-dealer.
8. With respect to solicitation of
subscriptions to or purchase of securities covered by a solicitation permit
issued by the Commissioner, the license required by this section is in lieu of
a license or permit otherwise required of the solicitor under any other law of
this State.
9. An applicant who is a resident of this
State must, as part of his or her application and at the applicant’s own
expense:
(a) Arrange to have a complete set of his or her
fingerprints taken by a law enforcement agency or other authorized entity
acceptable to the Commissioner; and
(b) Submit to the Commissioner:
(1) A completed fingerprint card and
written permission authorizing the Commissioner to submit the applicant’s
fingerprints to the Central Repository for Nevada Records of Criminal History
for submission to the Federal Bureau of Investigation for a report on the
applicant’s background and to such other law enforcement agencies as the
Commissioner deems necessary; or
(2) Written verification, on a form
prescribed by the Commissioner, stating that the fingerprints of the applicant
were taken and directly forwarded electronically or by another means to the
Central Repository and that the applicant has given written permission to the
law enforcement agency or other authorized entity taking the fingerprints to
submit the fingerprints to the Central Repository for submission to the Federal
Bureau of Investigation for a report on the applicant’s background and to such
other law enforcement agencies as the Commissioner deems necessary.
10. The Commissioner may:
(a) Unless the applicant’s fingerprints are
directly forwarded pursuant to subparagraph (2) of paragraph (b) of subsection
9, submit those fingerprints to the Central Repository for submission to the
Federal Bureau of Investigation and to such other law enforcement agencies as
the Commissioner deems necessary; and
(b) Request from each such agency any information
regarding the applicant’s background as the Commissioner deems necessary.
(Added to NRS by 1971, 1792; A 1997, 2204; 1999, 520, 544; 2003, 2871; 2011, 3391;
2013, 3837)
NRS 692B.190 License to sell
securities. [Effective on the date of the repeal of 42 U.S.C. § 666, the
federal law requiring each state to establish procedures for withholding,
suspending and restricting the professional, occupational and recreational
licenses for child support arrearages and for noncompliance with certain
processes relating to paternity or child support proceedings.]
1. No person may in this state solicit
subscription to or purchase of any security covered by a solicitation permit
issued under this chapter, unless then licensed therefor by the Commissioner.
2. Such a license may be issued only to
natural persons, and the Commissioner shall not license any person found by the
Commissioner to be:
(a) Dishonest or untrustworthy;
(b) Financially irresponsible;
(c) Of unfavorable personal or business history
or reputation; or
(d) For any other cause, reasonably unsuited for
fulfillment of the responsibilities of such a licensee.
3. The applicant for such a license must
file a written application therefor with the Commissioner, on forms and
containing inquiries as designated and required by the Commissioner. The
application must include or be accompanied by:
(a) An endorsement by the holder of the permit
under which the securities are proposed to be sold; and
(b) The application fee specified in NRS 680B.010.
4. The Commissioner shall promptly cause
an investigation to be made of the identity and qualifications of the
applicant.
5. The license, if issued, must be for the
period of the permit, and must automatically be extended if the permit is
extended.
6. The Commissioner shall revoke the
license if at any time after issuance the Commissioner has found that the
license was obtained through misrepresentation or concealment of facts, or that
the licensee is no longer qualified therefor, or that the licensee has
misrepresented the securities offered, or has otherwise conducted himself or
herself in or with respect to transactions under the license in a manner
injurious to the permit holder or to subscribers or prospects or the public.
7. This section does not apply to
securities broker-dealers registered as such under the Securities Exchange Act
of 1934, or with respect to securities the sale of which is underwritten, other
than on a best efforts basis, by such a broker-dealer.
8. With respect to solicitation of
subscriptions to or purchase of securities covered by a solicitation permit
issued by the Commissioner, the license required by this section is in lieu of
a license or permit otherwise required of the solicitor under any other law of
this state.
9. An applicant who is a resident of this
State must, as part of his or her application and at the applicant’s own
expense:
(a) Arrange to have a complete set of his or her
fingerprints taken by a law enforcement agency or other authorized entity
acceptable to the Commissioner; and
(b) Submit to the Commissioner:
(1) A completed fingerprint card and
written permission authorizing the Commissioner to submit the applicant’s
fingerprints to the Central Repository for Nevada Records of Criminal History
for submission to the Federal Bureau of Investigation for a report on the
applicant’s background and to such other law enforcement agencies as the
Commissioner deems necessary; or
(2) Written verification, on a form
prescribed by the Commissioner, stating that the fingerprints of the applicant
were taken and directly forwarded electronically or by another means to the
Central Repository and that the applicant has given written permission to the
law enforcement agency or other authorized entity taking the fingerprints to
submit the fingerprints to the Central Repository for submission to the Federal
Bureau of Investigation for a report on the applicant’s background and to such
other law enforcement agencies as the Commissioner deems necessary.
10. The Commissioner may:
(a) Unless the applicant’s fingerprints are
directly forwarded pursuant to subparagraph (2) of paragraph (b) of subsection
9, submit those fingerprints to the Central Repository for submission to the
Federal Bureau of Investigation and to such other law enforcement agencies as
the Commissioner deems necessary; and
(b) Request from each such agency any information
regarding the applicant’s background as the Commissioner deems necessary.
(Added to NRS by 1971, 1792; A 1997, 2204; 1999, 520, 544; 2003, 2871; 2011, 3391;
2013, 3837,
effective on the date of the repeal of 42 U.S.C. § 666, the federal law
requiring each state to establish procedures for withholding, suspending and
restricting the professional, occupational and recreational licenses for child
support arrearages and for noncompliance with certain processes relating to
paternity or child support proceedings)
NRS 692B.193 Payment of child support: Statement by applicant for permit or
license; grounds for denial of permit or license; duty of Commissioner.
[Effective until the date of the repeal of 42 U.S.C. § 666, the federal law
requiring each state to establish procedures for withholding, suspending and
restricting the professional, occupational and recreational licenses for child
support arrearages and for noncompliance with certain processes relating to
paternity or child support proceedings.]
1. A natural person who applies for the
issuance of a permit or license pursuant to this chapter shall submit to the
Commissioner the statement prescribed by the Division of Welfare and Supportive
Services of the Department of Health and Human Services pursuant to NRS 425.520. The statement must be
completed and signed by the applicant.
2. The Commissioner shall include the statement
required pursuant to subsection 1 in:
(a) The application or any other forms that must
be submitted for the issuance or renewal of the permit or license; or
(b) A separate form prescribed by the
Commissioner.
3. A permit or license may not be issued
by the Commissioner pursuant to this chapter if the applicant is a natural
person who:
(a) Fails to submit the statement required
pursuant to subsection 1; or
(b) Indicates on the statement submitted pursuant
to subsection 1 that the applicant is subject to a court order for the support
of a child and is not in compliance with the order or a plan approved by the
district attorney or other public agency enforcing the order for the repayment
of the amount owed pursuant to the order.
4. If an applicant indicates on the
statement submitted pursuant to subsection 1 that the applicant is subject to a
court order for the support of a child and is not in compliance with the order
or a plan approved by the district attorney or other public agency enforcing the
order for the repayment of the amount owed pursuant to the order, the
Commissioner shall advise the applicant to contact the district attorney or
other public agency enforcing the order to determine the actions that the
applicant may take to satisfy the arrearage.
(Added to NRS by 1997, 2202)
NRS 692B.197 Suspension of permit or license for failure to pay child support
or comply with certain subpoenas or warrants; reinstatement of permit or
license. [Effective until the date of the repeal of 42 U.S.C. § 666, the
federal law requiring each state to establish procedures for withholding,
suspending and restricting the professional, occupational and recreational
licenses for child support arrearages and for noncompliance with certain
processes relating to paternity or child support proceedings.]
1. If the Commissioner receives a copy of
a court order issued pursuant to NRS
425.540 that provides for the suspension of all professional, occupational
and recreational licenses, certificates and permits issued to a person who is
the holder of a permit or license issued pursuant to this chapter, the
Commissioner shall deem the permit or license issued to that person to be
suspended at the end of the 30th day after the date on which the court order
was issued unless the Commissioner receives a letter issued to the holder of
the permit or license by the district attorney or other public agency pursuant
to NRS 425.550 stating that the holder
of the permit or license has complied with the subpoena or warrant or has
satisfied the arrearage pursuant to NRS
425.560.
2. The Commissioner shall reinstate a
permit or license issued pursuant to this chapter that has been suspended by a
district court pursuant to NRS 425.540
if the Commissioner receives a letter issued by the district attorney or other
public agency pursuant to NRS 425.550
to the person whose permit or license was suspended stating that the person
whose permit or license was suspended has complied with the subpoena or warrant
or has satisfied the arrearage pursuant to NRS
425.560.
(Added to NRS by 1997, 2203)
NRS 692B.200 Mutual insurers: Initial qualifications.
1. When newly organized, a domestic mutual
insurer may be authorized to transact any one of the kinds of insurance listed
in the schedule contained in subsection 2.
2. When applying for an original
certificate of authority, the insurer must be otherwise qualified therefor
under this Code, and must have received and accepted bona fide applications as
to substantial insurable subjects for insurance of a substantial character of
the kind of insurance proposed to be transacted, must have collected in cash
the full premium therefor at a rate not less than that usually charged by other
insurers for comparable coverages, must have surplus funds on hand and
deposited as of the date such insurance coverages are to become effective, or,
in lieu of such applications, premiums, and surplus, may deposit and thereafter
maintain surplus, all in accordance with that part of the following schedule
which applies to the one kind of insurance the insurer proposes to transact:
(A) (B) (C) (D) (E) (F) (G) (H)
Max. Deposit Deposit
Min. Min.No. Min. Min. Amt. Min. of
No.of Subjects Prem. Amt. Ins.Ea. Surplus Surplus
Kind of Apps. Cov- Col- Ins.Ea. Subj. Funds In
Lieu
Ins. Accepted ered lected Subj. (v) (vi) (vi)
Life (i)...................... 500 500 Annual $2,000 $5,000 $100,000 $200,000
Health (ii)................ 500 500 Quarterly $25 $50 $100,000 $200,000
(Weekly Indemnity)
Property (iii)............ 100 250 Annual $3,000 $7,000 $100,000 $200,000
Casualty (iv)............. 50 500 Annual $5,000 $25,000 $200,000 $300,000
Expendable surplus: In addition to surplus deposited
and thereafter to be maintained as shown in column (G) or (H) in the above
schedule, the insurer when first authorized must have on hand additional
surplus funds in an amount not less than 150 percent of the applicable
deposited surplus required of it under the above schedule. Of such additional
surplus the insurer may expend two- thirds thereof thereafter in conduct of its
business, and shall maintain unimpaired the remaining one-third together with
such deposited surplus.
3. The following provisions are
respectively applicable to the schedule in subsection 2 and provisions as
indicated by like Roman numerals appearing in such schedule:
(i) No
group insurance or term policies for terms of less than 10 years shall be
included.
(ii) No
group, blanket or family plans of insurance shall be included. In lieu of
weekly indemnity a like premium value in medical, surgical and hospital
benefits may be provided. Any accidental death or dismemberment benefit
provided shall not exceed $5,000.
(iii) Only
insurance of the owner’s interest in real property may be included.
(iv) Insurance
of legal liability for bodily injury and property damage, to which the maximum
and minimum insured amounts apply, must be included.
(v) The
maximums provided for in column (F) are net of applicable reinsurance.
(vi) The
deposit of surplus in the amount specified in columns (G) and (H) must
thereafter be maintained unimpaired. The deposit is subject to the provisions
of NRS 682B.010 to 682B.120, inclusive (administration of
deposits).
As to the financial requirements for the authority of such
insurer to transact additional kinds of insurance, see NRS 693A.190.
(Added to NRS by 1971, 1793)
NRS 692B.210 Mutual insurers: Permit; bond or deposit.
1. Before soliciting applications for
insurance as required under NRS 692B.200, the
incorporators of the proposed insurer shall procure a solicitation permit as
required by NRS 692B.040, and shall file with the
Commissioner a corporate surety bond in the penal sum of $50,000 in favor of
the State of Nevada and conditioned as follows:
(a) Upon due accounting for and deposit, as
required under NRS 692B.230, of funds received as
premiums upon applications for insurance; and
(b) If the corporation fails to complete its
organization and secure a certificate of authority issued by the Commissioner
within the period allowed therefor by the solicitation permit, all premiums
collected from applicant members will be promptly returned to them, and all
other indebtedness of the corporation, other than any compensation to
directors, officers or solicitors of insurance applications, and costs incurred
by the State of Nevada in any legal proceedings for the liquidation or
dissolution of the corporation will be paid.
2. In lieu of such a bond, the
incorporators may deposit with the Commissioner cash in the amount of $50,000,
or securities of the United States Government or of the State of Nevada of a
market value of at least $50,000, and the Commissioner shall hold such deposit
in trust for the same purposes as apply to a bond under subsection 1.
3. If the corporation or an affiliate
corporation proposes also to offer securities for initial financing of the
proposed insurer, in addition to the securing of qualifying applications for
insurance, the bond or deposit required by this section may be combined with
that required under NRS 692B.150, with appropriate
extension of the conditions of such bond or deposit to comply with the
requirements of both sections, so that only one such bond or deposit of $50,000
shall be necessary for all such purposes.
4. The Commissioner shall release and
discharge the bond or deposit or remaining portion thereof held under this
section upon settlement of all liabilities, if any, against it.
(Added to NRS by 1971, 1794)
NRS 692B.220 Mutual insurers: Qualifying applications for insurance.
1. Upon issuance of the required
solicitation permit, the proposed insurer may commence solicitation of
requisite applications for insurance policies and may receive deposits of
premiums thereon.
2. All such applications shall be in
writing signed by the applicant, covering subjects of insurance resident,
located or to be performed in this state.
3. All such applications shall provide
that:
(a) Issuance of the policy is contingent upon the
insurer qualifying for and receiving a certificate of authority;
(b) No insurance is in effect unless and until
the certificate of authority has been issued;
(c) The prepaid premium or deposit, and
membership or policy fee, if any, shall be refunded in full to the applicant if
organization is not completed and the certificate of authority is not issued
and received by the insurer before expiration or other termination of the
solicitation permit; and
(d) All qualifying premiums shall be paid in
cash.
4. Solicitations for such qualifying
applications for insurance shall be by licensed agents of the corporation; and
the Commissioner shall upon the corporation’s request therefor and fulfillment
of the requirements applicable under chapter
683A of NRS (agents, brokers and solicitors), license as agents of the
corporation individuals qualified therefor under, and subject to, such
sections.
(Added to NRS by 1971, 1795)
NRS 692B.230 Mutual insurers: Deposit of premiums in escrow.
1. All sums collected by a domestic mutual
corporation as premiums or fees on qualifying applications for insurance
therein must be deposited in escrow with a bank, credit union or trust company
located in this state under a written agreement filed with and approved by the
Commissioner. The terms of such an agreement must be consistent with those of
the solicitation permit and of the applicable provisions of this section and NRS 692B.250.
2. Upon issuance to the corporation of a
certificate of authority as an insurer for the kind of insurance for which such
applications were solicited, all money so held in escrow becomes the money of
the insurer. Until the certificate of authority is issued, the money remains
the property of the applicants for insurance as respectively entitled thereto.
(Added to NRS by 1971, 1795; A 1999, 1553)
NRS 692B.240 Failure to complete or qualify.
1. The Commissioner shall withdraw all
funds held in escrow under NRS 692B.170, and
refund to securities subscribers or purchasers all sums paid in thereon under
the solicitation permit, less that part allowed and used for organization,
sales and promotion expenses, if:
(a) The permit holder has failed to complete its
organization or financing, within the terms of the permit, or, if to be an
insurer, it has failed to secure its certificate of authority, all before
expiration of the permit; or
(b) The permit is revoked.
2. As to funds paid in on subscriptions by
founders, promoters and incorporators and held on deposit in lieu of the bond
under subsection 3 of NRS 692B.150, only such
portion of such funds shall be refundable under this section as may remain
after discharge of all liabilities against the deposit under NRS 692B.150 and the charging of such funds with a
proportionate share of organization, sales and promotion expenses.
3. If a proposed domestic mutual insurer
fails to complete its organization and to secure its original certificate of
authority within the period allowed therefor by the solicitation permit, the
corporation shall transact no further business, and the Commissioner shall
return or cause to be returned to the persons entitled thereto all advance
deposits or payments of premiums or fees held in escrow under NRS 692B.230.
(Added to NRS by 1971, 1795)
NRS 692B.250 Voluntary dissolution.
1. At any time prior to the issuance of a
certificate of authority to a proposed domestic stock or mutual insurer, the
incorporators may voluntarily surrender the articles of incorporation and the
corporation may be voluntarily dissolved by written agreement filed with the
Commissioner. The agreement shall be signed and verified by a majority of the
incorporators, and shall be signed (without verification) by at least
two-thirds of all persons who theretofore have become subscribers to or
purchasers of securities of the corporation and (in the case of a proposed
mutual insurer) by at least two-thirds of all persons who theretofore have
applied for policies in the proposed insurer.
2. The Commissioner shall approve the
surrender of such articles of incorporation and dissolution if upon
investigation the Commissioner finds that:
(a) No insurance business has been transacted by
the corporation except (in the case of a proposed mutual insurer) for
solicitation of qualifying applications for insurance;
(b) Arrangements satisfactory to the Commissioner
have been made for the return to subscribers, purchasers and applicants of all
funds paid by them upon subscription or purchase of securities, or upon
applications for insurance, under the solicitation permit theretofore held by
the corporation, less (as to securities subscriptions and purchases) the part
thereof actually and lawfully used for expenses; and
(c) All obligations of the corporation have been
paid or discharged.
3. The articles of incorporation so
surrendered, together with the executed copy of the agreement, bearing thereon
the endorsed approval of the Commissioner, shall be filed with the Secretary of
State and thereupon the corporate existence of the corporation shall cease.
4. The provisions of NRS 696B.210 and 696B.220 (grounds for rehabilitation,
liquidation of domestic insurer) do not apply to the voluntary dissolution of a
proposed domestic insurer pursuant to this section.
(Added to NRS by 1971, 1796)
NRS 692B.260 Subsequent financing: Solicitation permit required; penalty.
1. No person referred to in NRS 692B.040 (solicitation permit required), after
receiving a certificate of authority, if an insurer, or after completing its
original organization and financing, if other than an insurer, shall in this
state solicit or receive funds in exchange for or grant options with respect to
its securities until it has applied to the Commissioner for, and has been
granted, a solicitation permit. This section is subject to the same exemptions
as are provided by NRS 692B.060 (exemptions).
2. The Commissioner shall issue such a
permit unless the Commissioner finds that:
(a) The funds proposed to be secured are
inadequate or excessive in amount for the purposes intended;
(b) The proposed securities or the manner of
their distribution would be unfair or inequitable to existing or proposed
security holders or policyholders of the issuer; or
(c) Other reasonable objections exist as to the
proposed financing.
3. Any such permit granted by the
Commissioner shall be for such duration, and shall contain such terms and be
issued upon such conditions, as the Commissioner may reasonably require for the
protection of existing or proposed investors. In the Commissioner’s discretion
escrow of funds, or a bond or deposit in lieu thereof, need not be required,
and other terms and conditions of the permit may be substantially the same as
or materially different from requirements made under this chapter as to
solicitation permits for initial financing; but no such permit shall allow
sales or promotion expense, for the sale of the securities in excess of the
amount reasonably required therefor, and in no event to exceed 15 percent of
the proceeds of such sales if and as such funds are actually received.
4. Every person who violates the
provisions of subsection 1 is subject to the same penalties prescribed by NRS 692B.040 (solicitation permit required; penalty).
(Added to NRS by 1971, 1797)
