The Nevada State Legislature adjourned last week following several important victories for the insurance industry, according to lobbying groups.
Passage of measures benefiting insurers and the defeat of several trial lawyer-sponsored bills were the focus of the American Insurance Association (AIA) lobbying efforts during the session.
“Nevada legislators approved a wide range of insurance-related bills, including measures to implement federal financial privacy laws and fraud-prevention legislation,” said Mark Sektnan, AIA assistant vice-president, western region.
The Legislature approved AB 618, a measure sponsored by the Nevada Department of Insurance, which gives the department the authority necessary to implement the federal financial privacy legislation known as the Gramm-Leach-Bliley Act. The new law allows unlicensed employees to provide services to existing customers as long as the employees do not give advice on policy coverages.
Nevada legislators also passed two AIA-sponsored measures: AB 44, which allows insurers to store claims records electronically in Nevada while maintaining the physical records out of the state; and AB 48, which allows workers’ compensation carriers to change the way they are assessed. Under AB 48, insurers will be assessed based on premiums paid instead of claims paid for payments made by the uninsured employers’ fund and the second injury fund.
The Nevada Legislature also defeated a package of bills sponsored by the trial lawyers to change the way construction defects are disputed and litigated. “Trial lawyers tried to import the class action-friendly atmosphere they have built in California to Nevada,” Sektnan said. “Insurers successfully defeated attempts by the trial bar to create a lawsuit-dependent system to resolve construction disputes similar to the system in California, which has stalled the construction of affordable housing and is driving up costs for home owners.”
The National Association of Independent Insurers expressed disappointment that lawmakers did not advance personal lines rate reform legislation that the NAII strongly advocated. “While we applaud the legislature for creating measures to keep the federal government out of producer licensing and state insurance regulation, we are disappointed that SB 4, the bill to modernize personal lines rate regulation, failed to gain approval in the Assembly,” said Sam Sorich, NAII’s vice president and western regional manager.
Bills to improve Nevada’s effort to investigate and prosecute insurance fraud were enacted. AB 135 and AB 134 increase funding for the insurance commissioner’s and the attorney general’s anti-fraud programs, revise the definition of “insurance fraud,” and allow insurers to recover restitution for the payment of claims that prove to be fraudulent.
Other noteworthy new laws include:
• AB 338, which requires workers compensation insurers to notify injured employees of their right to select an alternative treating physician or chiropractor.
• SB 6, which prohibits a lender from requiring a borrower, as a condition of obtaining or maintaining a loan secured by real property, to provide property insurance on improvements to real property in an amount that exceeds the reasonable replacement value of the improvements.
• SB 336, which enacts the Uniform Arbitration Act, but does not include provisions that authorize arbitrators to award punitive damages.
Gov. Guinn has called a special one-day session for June 14 to address reapportionment issues, but it is unlikely insurance issues will be discussed. The next regular session of the Nevada legislature will convene in February 2003.
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