NRS315.725. Program to jointly self-insure and purchase insurance or reinsurance.

      1.  Except as otherwise provided in subsection 3, any two or more affordable housing entities may establish and participate in a program to jointly self-insure and jointly purchase insurance or reinsurance for coverage under a plan of:

      (a) Casualty insurance, as that term is defined in NRS 681A.020, except for workers’ compensation and employer’s liability coverage;

      (b) Marine and transportation insurance, as that term is defined in NRS 681A.050;

      (c) Property insurance, as that term is defined in NRS 681A.060;

      (d) Surety insurance, as that term is defined in NRS 681A.070; or

      (e) Insurance for any combination of the kinds of insurance listed in paragraphs (a) to (d), inclusive.

      2.  A program established pursuant to subsection 1 must be administered by an entity which is organized as a nonprofit corporation, limited-liability company, partnership or trust, whether organized under the laws of this State or another state or operating in another state. A majority of the board of directors or other governing body of the entity administering the program must be affiliated with one or more of the affordable housing entities participating in the program.

      3.  This section does not apply to an affordable housing entity that individually self-insures or participates in a risk pooling arrangement, including a risk retention group or a risk purchasing group, with respect to the kinds of insurance set forth in subsection 1.

      4.  Except as otherwise provided in this section or by specific statute:

      (a) A program established pursuant to subsection 1 and the entity administering the program:

             (1) Shall be deemed not to be providing coverage which constitutes insurance; and

             (2) Are not subject to the provisions of title 57 of NRS; and

      (b) The entity administering a program established pursuant to subsection 1 shall be deemed not to be engaging in the transaction of insurance.

      5.  The entity administering a program established pursuant to subsection 1 shall provide any affordable housing entity that seeks to participate in the program with a written notice, in 10-point type or larger, before the affordable housing entity begins participating in the program, that the program is not regulated by the Commissioner and that, if the program or the entity administering the program is found insolvent, a claim under the program is not covered by the Nevada Insurance Guaranty Association Act.

      6.  The entity administering a program established pursuant to subsection 1 shall submit to the Commissioner:

      (a) Within 105 days after the end of the program’s fiscal year:

             (1) An annual financial statement for the program audited by a certified public accountant; and

             (2) An annual actuarial analysis for the program prepared by an actuary who meets the qualification standards for issuing statements of actuarial opinion in the United States established by the American Academy of Actuaries or its successor organization; and

      (b) Within 30 days after:

             (1) Filing with any other regulatory body, a claims audit report relating to the entity or the program, a copy of the claims audit report filed with the other regulatory body;

             (2) Issuance by any other regulatory body of a report of examination relating to the entity or the program, a copy of the report of examination issued by the other regulatory body;

             (3) The effective date of a plan of financing, management and operation for the entity or the program or any material change in such a plan, a copy of the plan or material change; and

             (4) The effective date of any material change in the scope of regulation of the entity or the program by any other state in which the entity operates, a statement of the material change.

      7.  The Commissioner may order an examination of a program established pursuant to subsection 1 or the entity administering the program based upon any credible evidence that the program or entity is in violation of this section or is operating or being operated while in an unsafe financial condition. Such an examination must be administered in accordance with NRS 679B.230 to 679B.300, inclusive, and any regulations adopted pursuant thereto.

      8.  If the Commissioner determines that a program established pursuant to subsection 1 or the entity administering the program is in violation of this section or is operating or being operated while in an unsafe financial condition, the Commissioner may issue and serve upon the entity administering the program an order to cease and desist from the violation or from administering or in any way operating the program.

      9.  The Commissioner may hold a hearing, without a request by any party, to determine whether a program established pursuant to subsection 1 or the entity administering the program is in violation of this section or is operating or being operated while in an unsafe financial condition. A person aggrieved by any act, threatened act or failure of the Commissioner to act, or by any report, rule, regulation or order of the Commissioner relating to this section, may request a hearing. Any hearing held pursuant to this subsection must be held in accordance with NRS 679B.310 to 679B.370, inclusive, and any regulations adopted pursuant thereto.

      10.  The provisions of this section must be liberally construed to grant affordable housing entities maximum flexibility to jointly self-insure and jointly purchase insurance or reinsurance to the extent that a program established pursuant to subsection 1 is being administered and otherwise operated in a safe financial condition and in a sound manner.

      11.  Each entity administering a program established pursuant to subsection 1 shall, on or before January 15 of each odd-numbered year, submit a report to the Director of the Legislative Counsel Bureau for transmittal to the Legislature. The report must include, without limitation, a list of the affordable housing entities participating in the program and any other information the Director deems relevant.

      12.  As used in this section:

      (a) “Affordable housing” means housing projects in which some of the dwelling units may be purchased or rented, with or without government assistance, on a basis that is affordable to persons of low income.

      (b) “Affordable housing entity” means:

             (1) A housing authority created under the laws of this State or another jurisdiction and any agency or instrumentality of a housing authority, including, but not limited to, a legal entity created to enter into an agreement which complies with NRS 277.055;

             (2) A nonprofit corporation organized under the laws of this State or another state that is engaged in providing affordable housing; or

             (3) A general or limited partnership or limited-liability company which is engaged in providing affordable housing and which is affiliated with a housing authority described in subparagraph (1) or a nonprofit corporation described in subparagraph (2) if the housing authority or nonprofit corporation:

                   (I) Has, or has the right to acquire, a financial or ownership interest in the partnership or limited-liability company;

                   (II) Has the power to direct the management or policies of the partnership or limited-liability company; or

                   (III) Has entered into a contract to lease, manage or operate the affordable housing owned by the partnership or limited-liability company.

      (c) “Commissioner” means the Commissioner of Insurance.

      (Added to NRS by 2011, 578)