Nrs: Chapter 692B - Formation And Capitalization Of Domestic Stock And Mutual Insurers; Financing Of Insurers And Holding Companies

Link to law: https://www.leg.state.nv.us/NRS/NRS-692B.html
Published: 2015

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[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)