NRS692B.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)