Nrs: Chapter 696B - Delinquent Insurers: Conservation, Rehabilitation And Liquidation

Link to law: https://www.leg.state.nv.us/NRS/NRS-696B.html
Published: 2015

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now
[Rev. 2/11/2015 12:28:18

PM--2014R2]

CHAPTER 696B - DELINQUENT INSURERS:

CONSERVATION, REHABILITATION AND LIQUIDATION

NRS 696B.010        Short

title.

NRS 696B.020        Applicability

of chapter.

NRS 696B.030        Definitions.

NRS 696B.040        “Ancillary

state” defined.

NRS 696B.050        “Creditor”

defined.

NRS 696B.060        “Delinquency

proceeding” defined.

NRS 696B.070        “Domiciliary

state” defined.

NRS 696B.080        “Foreign

country” defined.

NRS 696B.090        “General

assets” defined.

NRS 696B.100        “Impairment”

defined.

NRS 696B.110        “Insolvency”

defined.

NRS 696B.120        “Insurer”

defined.

NRS 696B.130        “Preferred

claim” defined.

NRS 696B.140        “Receiver”

defined.

NRS 696B.150        “Reciprocal

state” defined.

NRS 696B.160        “Secured

claim” defined.

NRS 696B.170        “Special

deposit claim” defined.

NRS 696B.180        “State”

defined.

NRS 696B.190        Jurisdiction

of delinquency proceedings; venue; exclusiveness of remedy; appeal.

NRS 696B.200        Jurisdiction

over related persons and transactions; service of process.

NRS 696B.210        Grounds

for conservation or rehabilitation of domestic insurer or domiciled alien

insurer.

NRS 696B.220        Grounds

for liquidation of domestic insurer or domiciled alien insurer.

NRS 696B.230        Grounds

for conservation: Foreign and alien insurers.

NRS 696B.240        Grounds

for ancillary liquidation: Foreign and alien insurers.

NRS 696B.250        Commencement

of proceeding.

NRS 696B.255        Commissioner

as receiver, rehabilitator or liquidator authorized to appoint special deputies

and advisory committee.

NRS 696B.260        Service

of process.

NRS 696B.270        Injunctions.

NRS 696B.280        Uniform

Insurers Liquidation Act: Composition; severability; interpretation.

NRS 696B.290        Conduct

of delinquency proceedings against domestic insurers and certain alien

insurers.

NRS 696B.300        Conduct

of delinquency proceedings against foreign insurers.

NRS 696B.310        Claims

of nonresidents against domestic insurers.

NRS 696B.320        Claims

against foreign insurers.

NRS 696B.330        Form

of claim; notice; hearing.

NRS 696B.340        Attachment

and garnishment of assets; execution.

NRS 696B.350        Limitations

on appointment of receiver; action by judgment creditor.

NRS 696B.360        Deposit

of money.

NRS 696B.370        Exemption

from fees.

NRS 696B.380        Borrowing

on pledge of assets.

NRS 696B.390        Termination

of conservation or rehabilitation.

NRS 696B.400        Date

rights fixed on liquidation.

NRS 696B.410        Prohibited

and voidable transfers and liens.

NRS 696B.412        Recovery

by receiver of certain distributions on capital stock and payments to directors,

officers and employees; scope of liability.

NRS 696B.415        Disbursements

to insurance guaranty associations; claims for unearned premiums.

NRS 696B.420        Order

of distribution of claims from estate of insurer on liquidation.

NRS 696B.430        Subordination

of claims for failure to cooperate.

NRS 696B.440        Offsets.

NRS 696B.450        Allowance

of certain claims.

NRS 696B.460        Time

to file claims.

NRS 696B.470        Report

and petition for assessment.

NRS 696B.480        Order

and levy of assessment.

NRS 696B.490        Assessment

prima facie correct; notice; payment; proceedings to collect.

NRS 696B.500        Summary

proceedings: Commissioner’s corrective orders authorized.

NRS 696B.510        Summary

proceedings: Appeal from Commissioner’s order.

NRS 696B.520        Summary

proceedings: Enforcement; penalty.

NRS 696B.530        Summary

proceedings: Seizure under court order.

NRS 696B.540        Summary

proceedings: Seizure under Commissioner’s order.

NRS 696B.550        Summary

proceedings: Conduct of administrative and judicial hearings.

NRS 696B.560        Summary

proceedings: Penalty for refusal to deliver property and records.

NRS 696B.565        Officers,

agents, employees and attorneys of Division: Immunity from liability;

indemnification.

NRS 696B.570        Federal

receivership.

_________

_________

 

      NRS 696B.010  Short title.  This

chapter constitutes and may be cited as the Insurers Conservation, Rehabilitation

and Liquidation Law.

      (Added to NRS by 1971, 1883)

      NRS 696B.020  Applicability of chapter.  The

applicable provisions of this chapter apply to:

      1.  All insurers

authorized to transact insurance in this state;

      2.  All insurers

having policyholders resident in this state;

      3.  All insurers

against whom a claim under an insurance contract may arise in this state;

      4.  All persons

in the process of organization, or holding themselves out as organizing, or

proposing to organize in this state for the purpose of becoming an insurer; and

      5.  All other

persons to whom such provisions are otherwise expressly made applicable by law.

      (Added to NRS by 1971, 1883; A 1995, 2167; 1997, 1455)

      NRS 696B.030  Definitions.  As

used in this chapter, unless the context otherwise requires, the words and

terms defined in NRS 696B.040 to 696B.180, inclusive, shall have the meanings ascribed

to them in NRS 696B.040 to 696B.180,

inclusive.

      (Added to NRS by 1971, 1884)

      NRS 696B.040  “Ancillary state” defined.  “Ancillary

state” means any state other than a domiciliary state.

      (Added to NRS by 1971, 1884)

      NRS 696B.050  “Creditor” defined.  “Creditor”

means a person having a claim, whether matured or unmatured, liquidated or

unliquidated, secured or unsecured, or absolute, fixed or contingent.

      (Added to NRS by 1971, 1884)

      NRS 696B.060  “Delinquency proceeding” defined.  “Delinquency

proceeding” means:

      1.  Any proceeding commenced against an

insurer pursuant to this chapter for the purpose of conserving, rehabilitating,

reorganizing or liquidating the insurer; or

      2.  The summary proceedings authorized by NRS 696B.500 to 696B.565,

inclusive.

      (Added to NRS by 1971, 1884)

      NRS 696B.070  “Domiciliary state” defined.  “Domiciliary

state” means the state in which an insurer is incorporated or organized or, as

to an alien insurer, the state in which at the commencement of delinquency

proceedings the larger amount of the insurer’s assets are held in trust or on

deposit for the benefit of policyholders and creditors in the United States of

America.

      (Added to NRS by 1971, 1884)

      NRS 696B.080  “Foreign country” defined.  “Foreign

country” means territory not in any state.

      (Added to NRS by 1971, 1884)

      NRS 696B.090  “General assets” defined.

      1.  “General assets” means all property,

real, personal or otherwise, not specifically mortgaged, pledged, deposited or

otherwise encumbered for the security or benefit of specified persons or a

limited class or classes of persons, and as to such specifically encumbered

property the term includes all such property or its proceeds in excess of the

amount necessary to discharge the sums secured thereby.

      2.  Assets held in trust or on deposit for

the security or benefit of all policyholders or all policyholders and creditors

in the United States of America are deemed general assets.

      (Added to NRS by 1971, 1884)

      NRS 696B.100  “Impairment” defined.  “Impairment”

exists as to:

      1.  A stock insurer when the insurer’s

assets do not at least equal the sum of its liabilities, including also its

paid-in capital stock account and the minimum surplus required to be maintained

under this Code for authority to transact the kinds of insurance transacted.

      2.  A mutual insurer when the insurer’s

assets do not at least equal the sum of the insurer’s liabilities and the

minimum surplus required under this Code to be maintained for authority to

transact the kinds of insurance transacted.

      (Added to NRS by 1971, 1885)

      NRS 696B.110  “Insolvency” defined.  “Insolvency”

exists:

      1.  When the insurer fails to meet its

obligations as they mature;

      2.  When a stock insurer’s assets are less

than the sum of its liabilities and its paid-in capital stock account;

      3.  When a mutual insurer’s assets are less

than the sum of its liabilities and the minimum basic surplus required to be

maintained by the insurer under this Code for authority to transact the kinds

of insurance transacted; or

      4.  As otherwise expressly provided in this

Code.

      (Added to NRS by 1971, 1885)

      NRS 696B.120  “Insurer” defined.  “Insurer,”

in addition to persons so defined under NRS

679A.100, includes also persons purporting to be insurers, or organizing or

holding themselves out as organizing in this state for the purpose of becoming

insurers.

      (Added to NRS by 1971, 1885)

      NRS 696B.130  “Preferred claim” defined.  “Preferred

claim” means any claim accorded priority of payment from the insurer’s general

assets under applicable law.

      (Added to NRS by 1971, 1885)

      NRS 696B.140  “Receiver” defined.  “Receiver”

means a receiver, liquidator, rehabilitator or conservator, as the context

requires.

      (Added to NRS by 1971, 1885)

      NRS 696B.150  “Reciprocal state” defined.  “Reciprocal

state” means any state other than this state in which in substance and effect

the provisions of the Uniform Insurers Liquidation Act, are in force, including

provisions requiring that the commissioner of insurance or the equivalent

insurance supervisory officer be the receiver of a delinquent insurer, and in

which effective provisions exist for avoidance of fraudulent conveyances and

unlawful preferential transfers.

      (Added to NRS by 1971, 1885)

      NRS 696B.160  “Secured claim” defined.

      1.  “Secured claim” means any claim secured

by mortgage, trust deed, pledge, deposit as security, escrow or otherwise, but

not including special deposit claims or claims against general assets.

      2.  “Secured claim” includes claims which

have become liens upon specific assets through judicial process and not

invalidated.

      (Added to NRS by 1971, 1886)

      NRS 696B.170  “Special deposit claim” defined.  “Special

deposit claim” means any claim secured by a deposit made under a statute for

the security or benefit of a limited class or classes of persons, but not

including any general assets.

      (Added to NRS by 1971, 1886)

      NRS 696B.180  “State” defined.  “State”

has the meaning ascribed to it in NRS

679A.120.

      (Added to NRS by 1971, 1886)

      NRS 696B.190  Jurisdiction of delinquency proceedings; venue; exclusiveness of

remedy; appeal.

      1.  The district court has original

jurisdiction of delinquency proceedings under NRS

696B.010 to 696B.565, inclusive, and any court

with jurisdiction may make all necessary or proper orders to carry out the

purposes of those sections.

      2.  The venue of delinquency proceedings

against a domestic insurer must be in the county in this state of the insurer’s

principal place of business or, if the principal place of business is located

in another state, in any county in this state selected by the Commissioner for

the purpose. The venue of proceedings against foreign insurers must be in any

county in this state selected by the Commissioner for the purpose.

      3.  At any time after commencement of a

proceeding, the Commissioner or any other party may apply to the court for an

order changing the venue of, and removing, the proceeding to any other county

of this state in which the proceeding may most conveniently, economically and

efficiently be conducted.

      4.  No court has jurisdiction to entertain,

hear or determine any petition or complaint praying for the dissolution,

liquidation, rehabilitation, sequestration, conservation or receivership of any

insurer, or for an injunction or restraining order or other relief preliminary,

incidental or relating to such proceedings, other than in accordance with NRS 696B.010 to 696B.565,

inclusive.

      5.  An appeal to the appellate court of

competent jurisdiction pursuant to the rules fixed by the Supreme Court

pursuant to Section 4 of Article 6

of the Nevada Constitution may be taken from any court granting or refusing

rehabilitation, liquidation, conservation or receivership, and from every order

in delinquency proceedings having the character of a final order as to the

particular portion of the proceedings embraced therein.

      (Added to NRS by 1971, 1886; A 1995, 1635; 1997, 3037; 2013, 1796)

      NRS 696B.200  Jurisdiction over related persons and transactions; service of

process.

      1.  A court of this state in which an order

of rehabilitation or liquidation has been entered in delinquency proceedings

against a domestic insurer or alien insurer domiciled in this state, has

jurisdiction also over persons, served as provided in subsection 2, in an

action brought by the insurer’s receiver on or arising out of such obligation

or relationship, as follows:

      (a) Persons obligated to the insurer as a result

of agency or brokerage or transactions between such persons and the insurer;

      (b) Reinsurers of the insurer and their

representatives; and

      (c) Past or present officers, managers, trustees,

directors, organizers and promoters of the insurer, and other persons in

positions of similar responsibility with the insurer.

      2.  As to those of such persons who are in

this state, personal service of process shall be made as in other civil

actions. As to those of such persons who cannot be found in this state at the

time process is to be served, personal service of process shall be made thereon

by a public officer of the jurisdiction in which such person may be found, in

the same manner as personal service of process is required to be made within

this state under the Nevada Rules of Civil Procedure; and the affidavit or

certificate under oath setting forth the facts of such service shall be filed

in the court in this state in which the action is pending.

      (Added to NRS by 1971, 1887)

      NRS 696B.210  Grounds for conservation or rehabilitation of domestic insurer

or domiciled alien insurer.  The

Commissioner may petition for an order directing the Commissioner to conserve

the assets of or to rehabilitate a domestic insurer or an alien insurer

domiciled in this state on any one or more of the following grounds:

      1.  On any ground for liquidation of the

insurer under NRS 696B.220, if the Commissioner

believes conservation or rehabilitation possible without substantial increase

of risk to creditors, policyholders or the public;

      2.  If the insurer is in unsound condition,

or is using, or has been subject to such methods and practices in the conduct

of its business as to render its further transaction of insurance presently or

prospectively hazardous to its policyholders, or creditors, or the public;

      3.  If the insurer’s solvency is endangered

by illegal action;

      4.  For material falsification of the

insurer’s records, reports or financial condition;

      5.  If the Commissioner finds after hearing

that any individual exercising executive power with respect to or otherwise

materially influencing or controlling the insurer, directly or indirectly, is

dishonest or untrustworthy in matters affecting the insurer, and has not been

or cannot effectively and permanently be removed from such power, influence or

control;

      6.  For unlawful concealment or removal by

the insurer of any of its records or assets;

      7.  For failure of the insurer, or its

parent corporation, or subsidiary or affiliated person controlled by the

insurer, to submit its books, accounts, records and affairs to the reasonable

inspection or examination of the Commissioner or an examiner of the

Commissioner as authorized under this Code;

      8.  If any individual exercising any

executive authority in the affairs of the insurer, or parent corporation, or

subsidiary or affiliated person has refused to be examined under oath, by the

Commissioner or an examiner of the Commissioner thereunto duly authorized,

whether within this state or otherwise, concerning the pertinent affairs of the

insurer, or parent corporation, or subsidiary, or affiliated person, or if

examined under oath refuses to divulge pertinent information reasonably known

to him or her;

      9.  For failure of officers, employees and

other representatives of the insurer, or parent corporation, or subsidiary, or

affiliated person to comply promptly with the reasonable requests of the

Commissioner or an examiner of the Commissioner for the purposes of and during

the conduct of any examination;

      10.  That a deadlock exists in the

insurer’s board of directors relative to the general management of the

insurer’s affairs, that the insurer’s stockholders or members (as to a mutual

insurer) are unable to break the deadlock, and that the same threatens

irreparable injury to the insurer, or its creditors, or its policyholders, or

to the public;

      11.  If the insurer has transferred or

attempted to transfer substantially its entire property or business, or has

entered into any transaction the effect of which is to merge or consolidate

substantially its entire property or business in that of any other insurer,

without first having obtained the written approval of the Commissioner as

required under this Code;

      12.  If the controlling stock of the

insurer has been transferred to others without compliance with the requirements

of NRS 693A.320 (transfer of

controlling stock), except where such transfer is by testamentary bequest or

inheritance;

      13.  If the insurer has willfully violated

its charter or a law of this state, or has willfully exceeded its corporate

powers;

      14.  If the insurer has requested or

consented to conservation or rehabilitation by a vote or written authorization

of a majority of its directors, or stockholders, or members (as to mutual

insurers); or

      15.  If the insurer has failed to pay any

valid judgment against it within 30 days after the judgment became final.

      (Added to NRS by 1971, 1887)

      NRS 696B.220  Grounds for liquidation of domestic insurer or domiciled alien

insurer.  The Commissioner may

apply to the court for an order appointing the Commissioner as receiver (if his

or her appointment as receiver is not then in effect) and directing the

Commissioner to liquidate the business of a domestic insurer or of the United

States branch of an alien insurer having trusteed assets in this state, whether

or not there has been a prior order directing the Commissioner to conserve or rehabilitate

the insurer, upon any one or more of the following grounds:

      1.  That the insurer has failed to cure an

impairment of surplus, or capital, or assets within the time allowed therefor

by any lawful order of the Commissioner;

      2.  That the insurer is insolvent, or has

commenced voluntary liquidation or dissolution, or attempts to commence or

prosecute or is the object, in this state or elsewhere, of any action or

proceeding to liquidate its business or affairs, or to dissolve its corporate

charter, or to procure the appointment of a receiver, trustee, custodian or

sequestrator under any law except this Code. This subsection does not apply to

the conversion of a stock insurer to an ordinary business corporation as

authorized under NRS 693A.300, or to

voluntary dissolution of the insurer pursuant to NRS 692B.250;

      3.  That the insurer has ceased for a

period of 1 year to transact insurance business;

      4.  If a proposed insurer has not completed

its organization and obtained a certificate of authority as an insurer within

the time allowed therefor under any applicable solicitation permit issued by

the Commissioner;

      5.  That efforts to rehabilitate the

insurer and remove the causes or adverse effects thereof for which

rehabilitation was instituted have failed despite all reasonable efforts by the

Commissioner, or cannot be continued without material increase of risk of loss

to the insurer’s creditors or policyholders; or

      6.  If the insurer has requested or

consented to liquidation by a vote or written authorization of a majority of

its directors, or stockholders, or members (if a mutual insurer).

      (Added to NRS by 1971, 1888)

      NRS 696B.230  Grounds for conservation: Foreign and alien insurers.  The Commissioner may apply to the court for an

order appointing the Commissioner as receiver or ancillary receiver, and

directing the Commissioner to conserve the assets within this state, of a

foreign or alien insurer:

      1.  Upon any of the applicable grounds

specified in NRS 696B.210 or 696B.220;

      2.  Upon the ground that the insurer’s

property has been sequestrated in its domiciliary sovereignty or in any other

sovereignty; or

      3.  In the case of an alien insurer, upon

the ground that the insurer has failed to make good an impairment of its

trusteed funds within the time required therefor by order of the Commissioner.

      (Added to NRS by 1971, 1889)

      NRS 696B.240  Grounds for ancillary liquidation: Foreign and alien insurers.  The Commissioner may apply to the court for an

order appointing the Commissioner as ancillary receiver of and directing the

Commissioner to liquidate the business of a foreign or alien insurer having

assets, business or claims in this state upon the appointment in the

domiciliary sovereignty of such insurer of a receiver, liquidator, conservator,

rehabilitator or other officer by whatever name called for the purpose of

liquidating the business of the insurer.

      (Added to NRS by 1971, 1889)

      NRS 696B.250  Commencement of proceeding.

      1.  The Commissioner shall commence a

delinquency proceeding authorized under this chapter, the Attorney General

representing the Commissioner, by filing a petition in a court of proper

jurisdiction praying for appointment of the Commissioner as receiver of the

insurer.

      2.  Upon the filing of the petition the

court shall issue an order directing the insurer to appear in court on the day

fixed in the order and show cause why the petition should not be granted.

Unless good cause is shown for a shorter period, the order shall require the

insurer so to show cause not less than 15 days nor more than 30 days from the

date of the order.

      3.  The order to show cause and service

thereof on the insurer shall constitute due and legal process and shall be in

lieu of any other process otherwise provided by law or court rule.

      (Added to NRS by 1971, 1890)

      NRS 696B.255  Commissioner as receiver, rehabilitator or liquidator authorized

to appoint special deputies and advisory committee.

      1.  The Commissioner, as receiver,

rehabilitator or liquidator, may appoint one or more special deputies who have

all the powers and responsibilities of a receiver, rehabilitator or liquidator,

and the Commissioner may employ such counsels, clerks and assistants as the

Commissioner considers necessary. The compensation of such special deputies,

counsels, clerks and assistants and all expenses of taking possession of the

insurer and of conducting the proceedings must be fixed by the Commissioner

with the approval of the court, and paid out of the money or other assets of

the insurer. The persons appointed pursuant to this section serve at the

pleasure of the Commissioner. The Commissioner, as receiver, rehabilitator or

liquidator, may, with the approval of the court, appoint an advisory committee

of policyholders, claimants or other creditors, including guaranty

associations, if the Commissioner considers such a committee necessary. The

committee serves at the pleasure of the Commissioner and serves without

compensation other than reimbursement for reasonable travel and other expenses.

No other committee of any nature may be appointed by the Commissioner or the

court in proceedings for receivership, rehabilitation or liquidation conducted

pursuant to this chapter.

      2.  If the property of the insurer does not

contain sufficient cash or liquid assets to defray the costs incurred, the

Commissioner may advance the costs so incurred out of any appropriation for the

maintenance of the Division. Any amounts so advanced for expenses of

administration must be repaid to the Commissioner out of the first available

money of the insurer.

      (Added to NRS by 1995, 1634)

      NRS 696B.260  Service of process.  A

certified copy of any order to show cause issued under NRS

696B.250, and a copy of the petition upon which the order is made, must be

served upon the insurer by delivering the same to its president, vice

president, secretary, treasurer, director, agent for service of process, or to

its managing agent, or attorney-in-fact, if a reciprocal insurer. If no such

officer or functionary can readily be found in this State, then such process

may be served upon the insurer by service thereof upon the Commissioner

pursuant to NRS 680A.250 and 680A.260, and in which case the

additional 10 days provided by subsection 3 of NRS 680A.260 does not apply.

      (Added to NRS by 1971, 1890; A 2007, 2727)

      NRS 696B.270  Injunctions.

      1.  Upon application by the Commissioner

for such an order to show cause, or at any time thereafter, the court may

without notice issue an injunction restraining the insurer, its officers,

directors, stockholders, members, subscribers, agents and all other persons

from the transaction of its business or the waste or disposition of its

property until the further order of the court, but the court shall so frame its

injunction as not to prevent the Nevada Life and Health Insurance Guaranty

Association and the Nevada Insurance Guaranty Association from exercising their

respective powers under this title.

      2.  The court may at any time during a

proceeding under NRS 696B.010 to 696B.565, inclusive, issue such other injunctions or

orders as may be deemed necessary to prevent interference with the Commissioner

or the proceeding, or waste of the assets of the insurer, or the commencement

or prosecution of any actions, or the obtaining of preferences, judgments,

attachments or other liens, or the making of any levy against the insurer or

against its assets or any part thereof.

      3.  No bond may be required of the

Commissioner as a prerequisite for the issuance of any injunction or

restraining order pursuant to this section.

      (Added to NRS by 1971, 1890; A 1991, 883)

      NRS 696B.280  Uniform Insurers Liquidation Act: Composition; severability;

interpretation.

      1.  This section, NRS

696B.030 to 696B.180, inclusive, (definitions)

and NRS 696B.290 to 696B.340,

inclusive, comprise and may be cited as the Uniform Insurers Liquidation Act.

      2.  If any provision of the Uniform

Insurers Liquidation Act or the application thereof to any person or

circumstances is held invalid, such invalidity shall not affect other

provisions or applications of the act which can be given effect without the

invalid provision or application, and to this end the provisions of the act are

declared to be severable.

      3.  The Uniform Insurers Liquidation Act

shall be so interpreted as to effectuate its general purpose to make uniform

the laws of those states which enact it. To the extent that its provisions,

when applicable, conflict with other provisions of this Code, the provisions of

the Uniform Insurers Liquidation Act shall control.

      (Added to NRS by 1971, 1891)

      NRS 696B.290  Conduct of delinquency proceedings against domestic insurers and

certain alien insurers.

      1.  Whenever under this chapter a receiver

is to be appointed in delinquency proceedings for an insurer, the court shall

appoint the Commissioner as such receiver. The court shall order the

Commissioner forthwith to take possession of the assets of the insurer and to

administer the assets under the orders of the court.

      2.  As a domiciliary receiver, the

Commissioner shall be vested by operation of law with the title to all of the

property, contracts and rights of action, and all of the books and records of

the insurer, wherever located, as of the date of entry of the order directing

the Commissioner to conserve, rehabilitate or liquidate a domestic insurer or

to liquidate the United States branch of an alien insurer domiciled in this

state, and the Commissioner shall have the right to recover the same and reduce

the same to possession; but ancillary receivers in reciprocal states shall

have, as to assets located in their respective states, the rights and powers

which are prescribed in this chapter for ancillary receivers appointed in this

state as to assets located in this state.

      3.  The filing or recording of the order

directing possession to be taken, or a certified copy thereof, in any office

where instruments affecting title to property are required to be filed or

recorded shall impart the same notice as would be imparted by a deed, bill of

sale or other evidence of title duly filed or recorded.

      4.  The Commissioner as domiciliary

receiver shall be responsible for the proper administration of all assets

coming into the possession or control of the Commissioner. The court may at any

time require a bond from the Commissioner or the deputies of the Commissioner

if deemed desirable for the protection of such assets.

      5.  Upon taking possession of the assets of

an insurer, the domiciliary receiver shall immediately proceed to conduct the

business of the insurer or to take such steps as are authorized by this chapter

for the purpose of rehabilitating, liquidating or conserving the affairs or

assets of the insurer.

      6.  In connection with delinquency

proceedings, the Commissioner may appoint one or more special deputy

commissioners to act for the Commissioner and the Commissioner may employ such

counsel, clerks and assistants as the Commissioner deems necessary. The

compensation of the special deputies, counsel, clerks or assistants and all

expenses of taking possession of the insurer and of conducting the proceedings

shall be fixed by the receiver and shall be paid out of the funds or assets of

the insurer. Within the limits of duties imposed upon them, special deputies

shall possess all the powers given to and, in the exercise of those powers,

shall be subject to all of the duties imposed upon the receiver with respect to

such proceedings.

      7.  During such receivership the

Commissioner shall file in the court, at regular intervals not less frequently

than quarterly, the Commissioner’s true reports in summary form of the

insurer’s affairs under the receivership, and of progress being made in

accomplishing the objectives of the receivership. All such reports, together

with such additional or special reports as the court may reasonably require,

shall be subject to review by the court; and all actions of the receiver

therein reported shall be subject to the court’s approval, but the court shall

not withhold approval or disapprove any such action unless found by the court

after a hearing thereon in open court to be unlawful, arbitrary or capricious.

      (Added to NRS by 1971, 1891)

      NRS 696B.300  Conduct of delinquency proceedings against foreign insurers.

      1.  Whenever under this chapter an

ancillary receiver is to be appointed in delinquency proceedings for an insurer

not domiciled in this State, the court shall appoint the Commissioner as

ancillary receiver. The Commissioner shall file a petition requesting the

appointment on the grounds set forth in NRS 696B.230

or 696B.240:

      (a) If the Commissioner finds that there are

sufficient assets of the insurer located in this State to justify the

appointment of an ancillary receiver; or

      (b) If 10 or more persons resident in this State

having claims against such insurer file a petition with the Commissioner

requesting the appointment of such ancillary receiver.

      2.  The domiciliary receiver for the

purpose of liquidating an insurer domiciled in a reciprocal state shall be

vested by operation of law with the title to all of the property, contracts and

rights of action, and all of the books and records of the insurer located in

this State, and the domiciliary receiver shall have the immediate right to

recover balances due from local agents and to obtain possession of any books

and records of the insurer found in this State. The domiciliary receiver shall

also be entitled to recover the other assets of the insurer located in this

State, except that upon the appointment of an ancillary receiver in this State,

the ancillary receiver shall during the ancillary receivership proceedings have

the sole right to recover such other assets. The ancillary receiver shall, as

soon as practicable, liquidate from their respective securities those special

deposit claims and secured claims which are proved and allowed in the ancillary

proceedings in this State, and shall pay the necessary expenses of the

proceedings. All remaining assets the ancillary receiver shall promptly

transfer to the domiciliary receiver. Subject to the provisions of this

section, the ancillary receiver and the deputies of the ancillary receiver

shall have the same powers and be subject to the same duties with respect to

the administration of such assets as a receiver of an insurer domiciled in this

State.

      3.  The domiciliary receiver of an insurer

domiciled in a reciprocal state may sue in this State to recover any assets of

such insurer to which the domiciliary receiver may be entitled under the laws

of this State.

      (Added to NRS by 1971, 1892)

      NRS 696B.310  Claims of nonresidents against domestic insurers.

      1.  In a delinquency proceeding begun in

this state against a domestic insurer, claimants residing in reciprocal states

may file claims either with the ancillary receivers, if any, in their

respective states, or with the domiciliary receiver. All such claims must be

filed on or before the last date fixed for the filing of claims in the

domiciliary delinquency proceedings.

      2.  Controverted claims belonging to

claimants residing in reciprocal states may either:

      (a) Be proved in this state; or

      (b) If ancillary proceedings have been commenced

in such reciprocal states, be proved in those proceedings. If a claimant elects

to prove a claim in ancillary proceedings and if notice of the claim and

opportunity to appear and be heard is afforded the domiciliary receiver of this

state, as provided in NRS 696B.320 with respect to

ancillary proceedings in this state, the final allowance of such claim by the

courts in the ancillary state shall be accepted in this state as conclusive as

to its amount and shall also be accepted as conclusive as to its priority, if

any, against special deposits or other security located within the ancillary

state.

      (Added to NRS by 1971, 1893)

      NRS 696B.320  Claims against foreign insurers.

      1.  In a delinquency proceeding in a

reciprocal state against an insurer domiciled in that state, claimants against

such insurer who reside within this state may file claims either with the

ancillary receiver, if any, appointed in this state, or with the domiciliary

receiver. All such claims must be filed on or before the last date fixed for

the filing of claims in the domiciliary delinquency proceedings.

      2.  Controverted claims belonging to

claimants residing in this state may either:

      (a) Be proved in the domiciliary state as

provided by the law of that state; or

      (b) If ancillary proceedings have been commenced

in this state, be proved in those proceedings. If any such claimant elects to

prove a claim in this state, the claimant shall file the claim with the

ancillary receiver and shall give notice in writing to the receiver in the

domiciliary state, either by registered or certified mail or by personal

service at least 40 days prior to the date set for hearing. The notice shall

contain a concise statement of the amount of the claim, the facts on which the

claim is based, and the priorities asserted, if any. If the domiciliary

receiver within 30 days after the giving of such notice gives notice in writing

to the ancillary receiver and to the claimant, either by registered or

certified mail or by personal service, of the intention of the domiciliary

receiver to contest such claim, the domiciliary receiver shall be entitled to

appear or to be represented in any proceeding in this state involving

adjudication of the claim. The final allowance of the claim by the courts of

this state shall be accepted as conclusive as to its amount and shall also be

accepted as conclusive as to its priority, if any, against special deposits or

other security located within this state.

      (Added to NRS by 1971, 1893)

      NRS 696B.330  Form of claim; notice; hearing.

      1.  All claims against an insurer against

which delinquency proceedings have commenced must be filed in the manner and

form established by the receiver and set forth in reasonable detail the amount

of the claim, or the basis upon which that amount can be ascertained, the facts

upon which the claim is based, and the priorities asserted, if any. All such

claims must be verified by the affidavit of the claimant, or someone authorized

to act on the behalf of the claimant and having knowledge of the facts, and be

supported by such documents as may be material thereto.

      2.  All claims filed in this State must be

filed with the receiver, whether domiciliary or ancillary, in this State, on or

before the last date for filing as specified in this chapter or as directed by

the court.

      3.  Except as otherwise provided in

subsection 4, after the last date for filing a claim against an insurer as

specified in this chapter, the receiver shall:

      (a) Determine whether to approve or deny, in

whole or in part, each claim against the insurer filed with the receiver

pursuant to subsection 2; and

      (b) If the receiver approves a claim, in whole or

in part, determine the class of the claim as provided in NRS 696B.420.

      4.  The receiver is not required to process

any claims in a class until it appears that assets will be available for

distribution to that class. If there are insufficient assets to process claims

for a class, the receiver shall notify the court and may make a recommendation

to the court for the processing of any such claims.

      5.  The receiver shall mail, by first-class

mail, postage prepaid, to each claimant that filed a claim with the receiver

pursuant to subsection 2, written notice of the determination regarding the

claim.

      6.  The receiver shall submit to the court

a report on the determination of the receiver on each claim approved in whole

or in part.

      7.  Not more than 60 days after the mailing

of the written notice pursuant to subsection 5 or the submission of the report

pursuant to subsection 6, whichever occurs later, a person may file with the

receiver an objection to the determination of the receiver on a claim.

      8.  If an objection is filed pursuant to

subsection 7, the receiver shall submit to the court a report on the

determination of the receiver on each claim to which an objection has been

filed. The court shall fix a time for a hearing on such claims and shall direct

the receiver to give notice of the hearing. The notice provided by the receiver

must:

      (a) Be sent to the claimant by first-class mail,

postage prepaid, not more than 30 days and not less than 10 days before the

hearing, on any claim to which an objection has been filed; and

      (b) Specify the time and place of the hearing.

      9.  A hearing may be conducted by the court

or by a master or referee appointed by the court. If a hearing is conducted by

a master or referee, the master or referee shall submit findings of fact and

recommendations to the court. The court shall enter an order approving or

denying, in whole or in part, a claim filed against an insurer. Any such order

is an appealable order.

      (Added to NRS by 1971, 1894; A 2007, 3331)

      NRS 696B.340  Attachment and garnishment of assets; execution.  During the pendency of delinquency proceedings

in this or any reciprocal state, no action or proceeding in the nature of an

attachment, garnishment or execution shall be commenced or maintained in the

courts of this state against the delinquent insurer or its assets. Any lien

obtained by any such action or proceeding within 4 months prior to the

commencement of any such delinquency proceedings or at any time thereafter is

void as against any rights arising in such delinquency proceedings.

      (Added to NRS by 1971, 1894)

      NRS 696B.350  Limitations on appointment of receiver; action by judgment

creditor.

      1.  Except as provided in subsection 2, no

order, judgment or decree enjoining, restraining or interfering with the

prosecution of the business of any insurer or for the appointment of a

temporary or permanent receiver of a domestic insurer shall be made or granted

otherwise than upon the petition of the Commissioner represented by the

Attorney General as provided in this chapter.

      2.  A judgment creditor may commence an

action for the enforcement and protection of his or her judgment or institute

proceedings supplementary to execution against any such debtor insurer, giving

30 days’ notice to the Commissioner of the judgment creditor’s intention so to

do, and in any such action or proceeding the court may, subject to NRS 696B.340, appoint a receiver for the purposes

thereof as the court may deem necessary.

      (Added to NRS by 1971, 1895)

      NRS 696B.360  Deposit of money.

      1.  Except as otherwise provided in this

section:

      (a) The money collected by the Commissioner in a

proceeding under this chapter must be from time to time deposited in one or

more state or national banks, savings banks, credit unions or trust companies,

and in the case of the insolvency or voluntary or involuntary liquidation of

any such depositary which is an institution organized and supervised under the

laws of this state, such deposits are entitled to priority of payment on an

equality with any other priority given by the banking laws of this state.

      (b) The Commissioner may deposit the money or any

part thereof in a national bank, credit union or trust company as a trust fund.

      2.  The Commissioner shall deposit in the

State Insurance Fund any money collected in a proceeding under this chapter

that is required to be held in trust by a successor organization of the State

Industrial Insurance System by NRS

616B.042. The money must be used by the Commissioner for the payment of

claims made against the successor organization under a policy of industrial

insurance issued by that organization, and any administration costs and

expenses related thereto. The payment of the claims must be made in accordance

with the provisions of this chapter.

      (Added to NRS by 1971, 1895; A 1999, 1555, 1834)

      NRS 696B.370  Exemption from fees.  The

Commissioner shall not be required to pay any fee to any public officer in this

state for service of process, or for filing, recording, issuing a transcript or

certificate or authenticating any paper or instrument pertaining to the

exercise by the Commissioner of any of the powers or duties conferred upon him

or her under this chapter, whether or not such paper or instrument is executed

by the Commissioner or the deputies, employees or attorneys of record of the

Commissioner and whether or not it is connected with the commencement of any

action or proceeding by or against the Commissioner, or with the subsequent

conduct of such action or proceeding.

      (Added to NRS by 1971, 1895)

      NRS 696B.380  Borrowing on pledge of assets.

      1.  For the purpose of facilitating the

rehabilitation, liquidation, conservation or dissolution of an insurer pursuant

to NRS 696B.010 to 696B.565,

inclusive, the Commissioner may, subject to the approval of the court, borrow

money and execute, acknowledge and deliver notes or other evidences of

indebtedness therefor and secure the repayment of the same by the mortgage,

pledge, assignment, transfer in trust or hypothecation of any or all of the

property, whether real, personal or mixed, of such insurer, and the

Commissioner, subject to the approval of the court, shall have power to take

any and all other action necessary and proper to consummate any such loan and

to provide for the repayment thereof.

      2.  The Commissioner shall be under no

obligation personally or in his or her official capacity to repay any loan made

pursuant to this section.

      (Added to NRS by 1971, 1895)

      NRS 696B.390  Termination of conservation or rehabilitation.  If at any time the court finds, after a

hearing in open court, upon petition of the Commissioner or of the insurer or

of its own motion, that the objectives of an order to conserve or rehabilitate

a domestic insurer or an alien insurer domiciled in this state have been

accomplished, and that the insurer can be returned to its own management

without further jeopardy to the insurer and its creditors or policyholders or

stockholders or to the public, the court may, upon a full report and accounting

by the Commissioner relative to the conduct of the insurer’s affairs during the

conservation or rehabilitation and of the insurer’s current financial

condition, terminate the conservation or rehabilitation and by order return the

insurer, its assets and affairs, to the insurer’s management.

      (Added to NRS by 1971, 1896)

      NRS 696B.400  Date rights fixed on liquidation.  The

rights and liabilities of the insurer and of its creditors, policyholders,

stockholders, members, subscribers and all other persons interested in its

estate shall, unless otherwise directed by the court, be fixed as of the date

on which the order directing the liquidation of the insurer is filed in the

office of the clerk of the court which made the order, subject to the

provisions of this chapter with respect to the rights of claimants holding

contingent claims.

      (Added to NRS by 1971, 1896)

      NRS 696B.410  Prohibited and voidable transfers and liens.

      1.  No insurer shall make any transfer of

or create any lien upon any of its property with the intent of giving to or

enabling any creditor or policyholder to obtain a greater percentage of his or

her debt than any other creditor or policyholder of the same class.

      2.  Any transfer of, or lien upon, any

property of any insurer made or created within 4 months prior to the filing of

a petition for an order to show cause under this chapter, which gives to any

creditor or policyholder or enables the creditor or policyholder to obtain a

greater percentage of his or her debt than any other creditor or policyholder

in the same class, and which is accepted by a creditor or policyholder having

reasonable cause to believe that such a preference will occur, is voidable.

Where the preference consists of a transfer, such period of 4 months shall not

expire until 4 months after the date of the recording or registering of the

transfer if by law such recording or registering is required.

      3.  Every director, officer, employee,

stockholder, member or any other person acting on behalf of such insurer, who,

within 2 years prior to the filing of a petition for an order to show cause

against such insurer under this chapter, knowingly participates in the making

of any transfer or the creation of any lien prohibited by subsection 1, and

every person receiving any property of, or cash surrender from, such insurer or

the benefit thereof as a result of a transaction voidable under subsection 2,

shall be jointly and severally liable therefor and shall be bound to account to

the Commissioner as receiver, rehabilitator, liquidator or conservator, as the

case may be.

      4.  The Commissioner as receiver,

rehabilitator, liquidator or conservator may avoid any transfer of or lien upon

the property of an insurer which any creditor, stockholder or member of such

insurer might have avoided and may recover the property so transferred or its

value from the person to whom it was transferred unless the person was a bona

fide holder for value prior to the date of the entry of an order to show cause

under this chapter. Such property may be recovered or its value collected from

whoever may have received it except a bona fide holder for value.

      (Added to NRS by 1971, 1896)

      NRS 696B.412  Recovery by receiver of certain distributions on capital stock

and payments to directors, officers and employees; scope of liability.

      1.  Except as otherwise provided in

subsections 2 and 4, if an order for liquidation or rehabilitation of a

domestic insurer has been issued, the receiver appointed under the order may

recover on behalf of the insurer:

      (a) From any parent corporation, holding company,

affiliate or person who otherwise controlled the insurer, the amount of any

distribution, other than a distribution of shares of the same class of stock,

made by the insurer on its capital stock; and

      (b) Any payment in the form of a bonus,

settlement on termination, or extraordinary adjustment of salary in a lump sum

made by the insurer or a subsidiary to a director, officer or employee,

Ê made during

the year preceding the petition for liquidation, conservation or

rehabilitation.

      2.  A distribution is not recoverable if

the parent corporation, holding company or affiliate shows that when made the

distribution was lawful and reasonable and that the insurer did not know and

could not reasonably have known that the distribution might adversely affect

the ability of the insurer to fulfill its contractual obligations.

      3.  A parent corporation, holding company

or person who otherwise controlled the insurer or affiliate at the time the

distribution or payment was made is liable up to the amount of the distribution

or payment which he or she received. A person who otherwise controlled the

insurer at the time a distribution was declared is liable up to the amount that

would have been received if the distribution had been made immediately. If two

or more persons are liable with respect to the same distribution, they are

jointly and severally liable.

      4.  The greatest amount recoverable under

this section is the amount needed in excess of all other available assets of

the impaired or insolvent insurer to pay its contractual obligations and

reimburse any guaranty fund.

      5.  To the extent that a person liable

under subsection 3 is insolvent or otherwise fails to pay a claim due from it,

a parent corporation, holding company or person who otherwise controlled it at

the time the distribution was made is jointly and severally liable for any resulting

deficiency in the amount recovered from the person so liable.

      (Added to NRS by 2001, 2251)

      NRS 696B.415  Disbursements to insurance guaranty associations; claims for

unearned premiums.

      1.  Upon the issuance of an order of

liquidation with a finding of insolvency against a domestic insurer, the

Commissioner shall apply to the district court for authority to disburse money

to the Nevada Insurance Guaranty Association or the Nevada Life and Health

Insurance Guaranty Association out of the marshaled assets of the insurer, as

money becomes available, in amounts equal to disbursements made or to be made

by the Association for claims-handling expense and covered-claims obligations

upon the presentation of evidence that disbursements have been made by the

Association. The Commissioner shall apply to the district court for authority

to make similar disbursements to insurance guaranty associations in other

jurisdictions if one of the Nevada Associations is entitled to like payment

pursuant to the laws relating to insolvent insurers in the jurisdiction in

which the organization is domiciled.

      2.  The Commissioner, in determining the

amounts available for disbursement to the Nevada Insurance Guaranty

Association, the Nevada Life and Health Insurance Guaranty Association and

similar organizations in other jurisdictions, shall reserve sufficient assets

for the payment of the expenses of administration.

      3.  The Commissioner shall establish

procedures for the ratable allocation of disbursements to the Nevada Insurance

Guaranty Association, the Nevada Life and Health Insurance Guaranty Association

and similar organizations in other jurisdictions, and shall secure from each

organization to which money is paid as a condition to advances in reimbursement

of covered-claims obligations an agreement to return to the Commissioner, on

demand, amounts previously advanced which are required to pay claims of secured

creditors and claims falling within the priorities established in paragraph (a)

or (b) of subsection 1 of NRS 696B.420.

      4.  The Commissioner, as receiver for an

insolvent insurer, may file a claim on behalf of all insureds for any unearned

premiums. The Nevada Insurance Guaranty Association, the Nevada Life and Health

Insurance Guaranty Association and similar organizations in other jurisdictions

shall accept the claim in lieu of requiring each insured to file a claim for

the unearned premium.

      (Added to NRS by 1977, 439; A 1997, 3037; 1999, 2524; 2003, 3333)

      NRS 696B.420  Order of distribution of claims from estate of insurer on

liquidation.

      1.  The order of distribution of claims

from the estate of the insurer on liquidation of the insurer must be as set

forth in this section. Each claim in each class must be paid in full or

adequate money retained for the payment before the members of the next class

receive any payment. No subclasses may be established within any class. Except

as otherwise provided in subsection 2, the order of distribution and of

priority must be as follows:

      (a) Administration costs and expenses, including,

but not limited to, the following:

             (1) The actual and necessary costs of

preserving or recovering the assets of the insurer;

             (2) Compensation for any services rendered

in the liquidation;

             (3) Any necessary filing fees;

             (4) The fees and mileage payable to witnesses;

and

             (5) Reasonable attorney’s fees.

      (b) All claims under policies, any claims against

an insured for liability for bodily injury or for injury to or destruction of

tangible property which are covered claims under policies, including any such claims

of the Federal Government or any state or local government, and any claims of

the Nevada Insurance Guaranty Association, the Nevada Life and Health Insurance

Guaranty Association and other similar statutory organizations in other

jurisdictions. Any claims under life insurance and annuity policies, whether

for death proceeds, annuity proceeds or investment values, must be treated as

loss claims. That portion of any loss for which indemnification is provided by

other benefits or advantages recovered or recoverable by the claimant may not

be included in this class, other than benefits or advantages recovered or

recoverable in discharge of familial obligations of support or because of

succession at death or as proceeds of life insurance, or as gratuities. No

payment made by an employer to an employee of the employer may be treated as a

gratuity.

      (c) Unearned premiums and small loss claims,

including claims under nonassessable policies for unearned premiums or other

premium refunds.

      (d) Except as otherwise provided in paragraph

(b), claims of the Federal Government.

      (e) Except as otherwise provided in paragraph

(b), claims of any state or local government, including, but not limited to, a

claim of a state or local government for a penalty or forfeiture.

      (f) Wage debts due employees for services

performed, not to exceed an amount equal to 2 months of monetary compensation

for each employee for services performed within 6 months before the filing of

the petition for liquidation or, if rehabilitation preceded liquidation, within

1 year before the filing of the petition for rehabilitation. Officers of the

insurer are not entitled to the benefit of this priority. The priority set

forth in this paragraph must be in lieu of any other similar priority

authorized by law as to wages or compensation of employees.

      (g) Residual classification, including any other

claims not falling within other classes pursuant to the provisions of this

section. Claims for a penalty or forfeiture must be allowed in this class only

to the extent of the pecuniary loss sustained from the act, transaction or

proceeding out of which the penalty or forfeiture arose, with reasonable and

actual costs occasioned thereby. The remainder of the claims must be postponed

to the class of claims specified in paragraph (j).

      (h) Judgment claims based solely on judgments. If

a claimant files a claim and bases the claim on the judgment and on the

underlying facts, the claim must be considered by the liquidator, who shall

give the judgment such weight as the liquidator deems appropriate. The claim as

allowed must receive the priority it would receive in the absence of the

judgment. If the judgment is larger than the allowance on the underlying claim,

the remaining portion of the judgment must be treated as if it were a claim

based solely on a judgment.

      (i) Interest on claims already paid, which must

be calculated at the legal rate compounded annually on any claims in the

classes specified in paragraphs (a) to (h), inclusive, from the date of the

petition for liquidation or the date on which the claim becomes due, whichever

is later, until the date on which the dividend is declared. The liquidator,

with the approval of the court, may:

             (1) Make reasonable classifications of

claims for purposes of computing interest;

             (2) Make approximate computations; and

             (3) Ignore certain classifications and

periods as de minimis.

      (j) Miscellaneous subordinated claims, with

interest as provided in paragraph (i):

             (1) Claims subordinated by NRS 696B.430;

             (2) Claims filed late;

             (3) Portions of claims subordinated

pursuant to the provisions of paragraph (g);

             (4) Claims or portions of claims the

payment of which is provided by other benefits or advantages recovered or

recoverable by the claimant; and

             (5) Claims not otherwise provided for in

this section.

      (k) Preferred ownership claims, including surplus

or contribution notes, or similar obligations, and premium refunds on

assessable policies. Interest at the legal rate must be added to each claim, as

provided in paragraphs (i) and (j).

      (l) Proprietary claims of shareholders or other

owners.

      2.  If there are no existing or potential

claims of the government against the estate, claims for wages have priority

over any claims set forth in paragraphs (c) to (k), inclusive, of subsection 1.

The provisions of this subsection must not be construed to require the

accumulation of interest for claims as described in paragraph (i) of subsection

1.

      (Added to NRS by 1971, 1897; A 1977, 440; 1997, 3038; 1999, 2524; 2003, 3334)

      NRS 696B.430  Subordination of claims for failure to cooperate.  If an ancillary receiver in another state or

foreign country, by whatever name called, fails to transfer to the domiciliary

liquidator in this state any assets within the control of the ancillary

receiver other than special deposits, diminished only by the expenses, if any,

of the ancillary receivership, claims filed in the ancillary receivership, other

than special deposit claims or secured claims, must be placed in the class of

claims specified in paragraph (j) of subsection 1 of NRS

696B.420.

      (Added to NRS by 1971, 1899; A 1997, 3040; 1999, 2526)

      NRS 696B.440  Offsets.

      1.  Except as provided in subsection 2, in

all cases of mutual debts or mutual credits between the insurer and another

person in connection with any action or proceeding under this chapter, such

credits and debts shall be setoff and the balance only shall be allowed or

paid.

      2.  No offset shall be allowed in favor of

any such person where:

      (a) The obligation of the insurer to such person

would not at the date of the entry of any liquidation order or otherwise, as

provided in NRS 696B.400, entitle him or her to

share as a claimant in the assets of the insurer;

      (b) The obligation of the insurer to such person

was purchased by or transferred to such person with a view of its being used as

an offset; or

      (c) The obligation of such person is to pay an

assessment levied against the members of a mutual insurer, or against the

subscribers of a reciprocal insurer, or is to pay a balance upon the

subscription to the capital stock of a stock insurer.

      (Added to NRS by 1971, 1899)

      NRS 696B.450  Allowance of certain claims.

      1.  No contingent and unliquidated claim

shall share in a distribution of the assets of an insurer which has been

adjudicated to be insolvent by an order made pursuant to this chapter, except

that such claim shall be considered, if properly presented, and may be allowed

to share where:

      (a) Such claim becomes absolute against the

insurer on or before the last day for filing claims against the assets of such

insurer; or

      (b) There is a surplus and the liquidation is

thereafter conducted upon the basis that such insurer is solvent.

      2.  Where an insurer has been so

adjudicated to be insolvent any person who has a cause of action against an

insured of such insurer under a liability insurance policy issued by such

insurer shall have the right to file a claim in the liquidation proceeding,

regardless of the fact that such claim may be contingent, and such claim may be

allowed:

      (a) If it may be reasonably inferred from the

proof presented upon such claim that such person would be able to obtain a

judgment upon such cause of action against such insured;

      (b) If such person furnishes suitable proof,

unless the court for good cause shown otherwise directs, that no further valid

claim against such insurer arising out of his or her cause of action other than

those already presented can be made; and

      (c) If the total liability of such insurer to all

claimants arising out of the same act of its insured is no greater than its

maximum liability would be were it not in liquidation.

      3.  No judgment against such an insured

taken after the date of entry of the liquidation order shall be considered in

the liquidation proceedings as evidence of liability, or of the amount of

damages, and no judgment against an insured taken by default, or by collusion

prior to the entry of the liquidation order shall be considered as conclusive

evidence in the liquidation proceedings, either of the liability of such insured

to such person upon such cause of action or of the amount of damages to which

such person is therein entitled.

      4.  No claim of any secured claimant shall

be allowed at a sum greater than the difference between the value of the claim

without security and the value of the security itself as of the date of the

entry of the order of liquidation or such other date set by the court for

determining rights and liabilities as provided in NRS

696B.400 unless the claimant surrenders his or her security to the

Commissioner, in which event the claim shall be allowed in the full amount for

which it is valued.

      (Added to NRS by 1971, 1899)

      NRS 696B.460  Time to file claims.

      1.  If upon the entry of an order of

liquidation under this chapter or at any time thereafter during liquidation

proceedings the insurer is not clearly solvent, the court shall, upon a hearing

after such notice as it deems proper, make and enter an order adjudging the

insurer to be insolvent.

      2.  After the entry of the order of

insolvency, regardless of any prior notice that may have been given to

creditors, the Commissioner shall notify all persons who may have claims

against the insurer to file such claims with him or her, at a place and within

the time specified in the notice, or that such claims shall be forever barred.

The time specified in the notice shall be as fixed by the court for filing of

claims, which shall be not less than 6 months after the entry of the order of insolvency.

The notice shall be given in such manner and for such reasonable period of time

as may be ordered by the court.

      (Added to NRS by 1971, 1900)

      NRS 696B.470  Report and petition for assessment.  Within

3 years after the date of the entry of an order of rehabilitation or

liquidation of a domestic mutual insurer or a domestic reciprocal insurer, the

Commissioner may make and file a report and petition to the court setting

forth:

      1.  The reasonable value of the assets of

the insurer;

      2.  The liabilities of the insurer to the

extent thus far ascertained by the Commissioner;

      3.  The aggregate amount of the assessment,

if any, which the Commissioner deems reasonably necessary to pay all claims,

the costs and expenses of the collection of the assessments and the costs and

expenses of the delinquency proceedings in full; and

      4.  Any other information relative to the

affairs or property of the insurer that the Commissioner deems material.

      (Added to NRS by 1971, 1900)

      NRS 696B.480  Order and levy of assessment.

      1.  Upon the filing and reading of the

report and petition provided for in NRS 696B.470,

the court, ex parte, may order the Commissioner to assess all members or

subscribers of the insurer who may be subject to such an assessment, in such an

aggregate amount as the court finds reasonably necessary to pay all such valid

claims as may be timely filed and proved in the delinquency proceedings,

together with the costs and expenses of levying and collecting assessments and

the costs and expenses of the delinquency proceedings in full. Any such order

shall require the Commissioner to assess each such member or subscriber for his

or her proportion of the aggregate assessment, according to such reasonable

classification of such members or subscribers and formula as may be made by the

Commissioner and approved by the court.

      2.  The court may order additional

assessments upon the filing and reading of any amendment or supplement to the

report and petition referred to in subsection 1, if such amendment or

supplement is filed within 3 years after the date of the entry of the order of

rehabilitation or liquidation.

      3.  After the entry of the order to levy

and assess members or subscribers of an insurer referred to in subsection 1 or

2, the Commissioner shall levy and assess members or subscribers in accordance

with the order.

      4.  The total of all assessments against

any member or subscriber with respect to any policy, whether levied pursuant to

this chapter or pursuant to any other provision of this Code, shall be for no

greater amount than that specified in the policy or policies of the member or

subscriber and as limited under this Code, except as to any policy which was

issued at a rate of premium below the minimum rate lawfully permitted for the

risk insured, in which event the assessment against any such policyholder shall

be upon the basis of the minimum rate for such risk.

      5.  No assessment shall be levied against

any member or subscriber with respect to any nonassessable policy issued in

accordance with this Code.

      (Added to NRS by 1971, 1901)

      NRS 696B.490  Assessment prima facie correct; notice; payment; proceedings to

collect.

      1.  Any assessment of a subscriber or

member of an insurer made by the Commissioner pursuant to the order of court

fixing the aggregate amount of the assessment against all members or

subscribers and approving the classification and formula made by the

Commissioner under subsection 1 of NRS 696B.480

shall be prima facie correct.

      2.  Each member or subscriber shall be

notified of the amount of the assessment to be paid by the member or subscriber

by written notice mailed to the address of the member or subscriber last of

record with the insurer. Failure of the member or subscriber to receive the

notice so mailed, within the time specified therein or at all, shall be no

defense in any proceeding to collect the assessment.

      3.  If any such member or subscriber fails

to pay the assessment within the period specified in the notice, which period

shall not be less than 20 days after mailing, the Commissioner may obtain an

order in the delinquency proceedings requiring the member or subscriber to show

cause at a time and place fixed by the court why judgment should not be entered

against such member or subscriber for the amount of the assessment together

with all costs, and a copy of the order and a copy of the petition therefor

shall be served upon the member or subscriber within the time and in the manner

designated in the order.

      4.  If the subscriber or member, after due

service of a copy of the order and petition referred to in subsection 3 is made

upon the subscriber or member:

      (a) Fails to appear at the time and place

specified in the order, judgment shall be entered against the subscriber or

member as prayed for in the petition; or

      (b) Appears in the manner and form required by

law in response to the order, the court shall hear and determine the matter and

enter a judgment in accordance with its decision.

      5.  The Commissioner may collect any such

assessment through any other lawful means.

      (Added to NRS by 1971, 1901)

      NRS 696B.500  Summary proceedings: Commissioner’s corrective orders

authorized.

      1.  If the Commissioner determines after a

hearing that any insurer has committed or engaged in, or is committing or

engaging in, or is about to commit or engage in any act, practice or

transaction that would subject it to formal delinquency proceedings under this

chapter, the Commissioner may make and serve upon the insurer and other persons

involved, such orders (other than seizure orders under NRS

696B.530 and 696B.540) as the Commissioner

deems reasonably necessary to correct, eliminate or remedy such conduct,

condition or ground. Orders to cure impairment of capital or surplus of a

domestic insurer are subject to NRS

693A.260 and 693A.270.

      2.  If the Commissioner believes that

irreparable harm to the insurer, or its policyholders, creditors or the public

may occur unless an order of the Commissioner is issued with immediate effect,

the Commissioner may make and serve an order without notice and before hearing,

and shall simultaneously therewith serve upon the insurer and other persons involved

the notice of hearing as required under subsection 3.

      3.  The Commissioner’s order and notice of

hearing shall be served by personal service in any manner provided by the

Nevada Rules of Civil Procedure.

      (Added to NRS by 1971, 1902)

      NRS 696B.510  Summary proceedings: Appeal from Commissioner’s order.

      1.  If the Commissioner has issued a

summary order before hearing as provided in subsection 2 of NRS 696B.500, any person upon whom such order is

served may waive the Commissioner’s hearing and apply for any immediate

judicial relief available under law and without first exhausting his or her

administrative remedies.

      2.  NRS

679B.370 (appeal from Commissioner) applies to appeals from the

Commissioner’s order made after hearing.

      (Added to NRS by 1971, 1902)

      NRS 696B.520  Summary proceedings: Enforcement; penalty.

      1.  The Commissioner may apply for and any

district court may grant such restraining orders, temporary and permanent

injunctions and other orders as may be deemed necessary to enforce the

Commissioner’s order.

      2.  A violation of any order of the

Commissioner issued under NRS 696B.500 by any

person as to whom the order is in effect subjects the person to a penalty of

not more than $10,000, to be collected in a civil action brought by the

Attorney General in the name of the State of Nevada. The Attorney General shall

deposit all money so collected in the State Treasury for credit to the State

General Fund.

      (Added to NRS by 1971, 1903; A 1979, 122; 1993, 573, 1924, 2267; 1995, 692)

      NRS 696B.530  Summary proceedings: Seizure under court order.

      1.  Upon filing by the Commissioner in any

district court of this state of his or her verified petition alleging any

ground for a formal delinquency proceeding against an insurer under this

chapter and that the interests of the insurer’s policyholders or creditors or

the public will be jeopardized by delay, and setting forth the order deemed

necessary by the Commissioner, the court shall, ex parte and without notice or

hearing, issue the requested order. The requested order may:

      (a) Direct the Commissioner to take possession

and control of all or part of the property, books, accounts and records of the

insurer and the premises occupied by it for transaction of its business; and

      (b) Until further order of the court, enjoin the

insurer and its officers, managers, agents and employees from removal,

concealment or other disposition of its property, and from the transaction of

its business, except with the Commissioner’s written consent.

      2.  The court’s order shall be for such

duration, specified in the order, as the court deems necessary to enable the

Commissioner to ascertain the insurer’s condition. On motion of any party or on

its own motion, the court may hold such hearings as it deems desirable after

such notice as it deems appropriate, and extend or shorten the duration or

modify the terms of the order. The court shall vacate the seizure order if the

Commissioner fails to commence a formal proceeding under this chapter after

reasonable opportunity to do so; and a seizure order is automatically vacated

by issuance of the court’s order pursuant to formal delinquency proceedings

under this chapter.

      3.  Entry of a seizure order under this

section does not constitute an anticipatory breach of any contract of the

insurer.

      (Added to NRS by 1971, 1903)

      NRS 696B.540  Summary proceedings: Seizure under Commissioner’s order.

      1.  If it appears to the Commissioner that

the interests of policyholders, creditors or the public will be jeopardized by

delay incident to requesting a court seizure order, then on any ground which

would justify a court seizure order under NRS 696B.530,

and without notice and without applying to the court, the Commissioner may

issue a seizure order which must contain a statement verified by the

Commissioner of the grounds of the Commissioner’s action. As directed by the seizure

order, the Commissioner’s representatives shall forthwith take possession and

control of all or part of the property, books, accounts and records of the

insurer, and of the premises occupied by the insurer for transaction of its

business. The Commissioner shall retain possession and control until the order

is vacated or is replaced by an order of court pursuant to subsection 2, or

pursuant to a formal proceeding under this chapter.

      2.  At any time after seizure under

subsection 1, the insurer may apply to the district court for Carson City. The

court shall thereupon order the Commissioner to appear forthwith and shall

thereafter proceed as if the order were a court seizure order issued under NRS 696B.530.

      3.  Every peace officer of this state shall

assist the Commissioner in making and enforcing any such seizure, and every

sheriff and police department shall furnish the Commissioner with such

deputies, patrol officers or other officers as are necessary for the purpose.

      4.  Entry of a seizure order under this

section does not constitute an anticipatory breach of any contract of the

insurer.

      (Added to NRS by 1971, 1904)

      NRS 696B.550  Summary proceedings: Conduct of administrative and judicial

hearings.

      1.  The Commissioner shall hold all

hearings in summary proceedings privately unless the insurer requests a public

hearing, in which case the hearing must be public.

      2.  The court may hold all hearings in

summary proceedings and judicial reviews thereof privately in chambers, and

shall do so on request of the insurer proceeded against.

      3.  In all summary proceedings and judicial

reviews thereof, all records of the insurer, other documents and all Division

files and court records and papers, so far as they pertain to or are part of

the record of the summary proceedings, are confidential except as otherwise

provided in NRS 239.0115 and except as

necessary to obtain compliance therewith, unless the court after hearing

arguments by the parties in chambers, orders otherwise, or unless the insurer

requests that the matter be made public. Until the court otherwise orders, all

papers filed with the clerk of the court must be held by the clerk of the court

in a confidential file.

      4.  If at any time it appears to the court

that any person whose interest is or will be substantially affected by an order

did not appear at the hearing and has not been served, the court may order that

notice be given and the proceedings be adjourned to give the person an

opportunity to appear, on such terms as may be reasonable and just.

      (Added to NRS by 1971, 1904; A 1991, 1635; 1993, 1924; 2007, 2160)

      NRS 696B.560  Summary proceedings: Penalty for refusal to deliver property and

records.  Any person having

possession or custody of and refusing to deliver to the Commissioner or a

representative of the Commissioner upon request any of the property, books,

accounts, documents or other records of an insurer against which a seizure

order or a summary order has been issued by the Commissioner or by the court,

as provided in NRS 696B.500 to 696B.550, inclusive, is guilty of a misdemeanor.

      (Added to NRS by 1971, 1905)

      NRS 696B.565  Officers, agents, employees and attorneys of Division: Immunity

from liability; indemnification.

      1.  The Commissioner, as receiver, all

present and former deputy receivers, special deputy receivers and their

employees, and the other officers, agents, employees and attorneys of the

Division are immune from liability, both personally and in their official

capacities, for any claim for damage to or loss of property or personal injury

or other civil liability caused by or resulting from any alleged act, error or

omission of the officers, agents, employees and attorneys of the Division

arising out of or by reason of their duties or employment. This subsection must

not be construed to hold the officers, agents, employees and attorneys of the

Division immune from liability for any damage, loss, injury or liability caused

by actual malice.

      2.  Attorneys, accountants, auditors and

other professional persons or firms who are retained by the Commissioner as

independent contractors and their employers must not be considered employees

for the purposes of this chapter.

      3.  The Commissioner, all present and

former deputy receivers, special deputy receivers and their employees, and the

other officers, agents, employees and attorneys of the Division must be

indemnified for all expenses, attorney’s fees, judgments, settlements, decrees,

or amounts due or paid in satisfaction of, or incurred in the defense of, such

a legal action, unless it is determined upon a final adjudication on the merits

of the case that the alleged acts, error or omission of the officer, agent,

employee or attorney of the division did not arise out of or by reason of his

or her duties or employment and was caused by actual malice.

      4.  The State may seek indemnification for

the payment of expenses, judgments, settlements, decrees, attorney’s fees,

surety bond premiums or other amounts paid or to be paid from the insurer’s

assets. Any payment pursuant to this section shall be deemed an administrative

expense of the insurer.

      (Added to NRS by 1997, 3037; A 2001, 2252)

      NRS 696B.570  Federal receivership.

      1.  If the Commissioner believes that

rehabilitation or liquidation of a domestic insurer or alien insurer domiciled

in this state upon grounds for such rehabilitation or liquidation set forth in

this chapter would thereby be facilitated, and whether or not delinquency

proceedings against the insurer are already pending in the courts of this

state, the Commissioner may cause or consent to the filing of a petition in a

federal district court in another state for the appointment of a federal

receiver of the insurer. The Commissioner may intervene in any such action, and

may accept appointment as the federal receiver if so designated. Upon the

designation of a federal receiver in any such action, the courts of this state

shall relinquish jurisdiction of the rehabilitation or liquidation of the

insurer upon the Commissioner’s motion therefor.

      2.  The provisions of this chapter relating

to delinquency proceedings in courts of this state shall apply to such a

federal receivership to the extent applicable and appropriate.

      3.  If the Commissioner is appointed a

federal receiver under this section, the Commissioner shall comply with any

requirements necessary to give the Commissioner title to and control over the

insurer’s assets and affairs.

      (Added to NRS by 1971, 1905)