1. If the Commissioner finds after a hearing that in any part of this state any essential insurance coverage is not readily available in the voluntary market, and that the public interest requires such availability, the Commissioner may by regulation promulgate plans to provide such insurance coverages for any risks in this state which are equitably entitled to but otherwise unable to obtain such coverage, or may call upon insurers to prepare plans for approval by the Commissioner. Such plans may also include any kind of reinsurance that is unavailable and that would facilitate making essential insurance coverage available where it would otherwise not be available.

2. The plan promulgated or prepared under subsection 1 must:

(a) Give consideration to the need for adequate and readily accessible coverage, alternative methods of improving the market affected, the preferences of the insurers and agents, the inherent limitations of the insurance mechanism, the need for reasonable underwriting standards, and the requirement of reasonable loss-prevention measures;

(b) Establish procedures that will create minimum interference with the voluntary market;

(c) Spread the burden imposed by the facility equitably and efficiently among insurers; and

(d) Establish procedures for applicants and participants to have grievances reviewed by an impartial body.

3. Each plan must require participation by all insurers doing any business in this state of the kinds covered by the specific plan and all agents licensed to represent such insurers in this state for the specified kinds of business, except that the Commissioner may exclude kinds of insurance, classes of insurers or classes of persons for administrative convenience or because it is not equitable or practicable to require them to participate in the plan.

4. The plan may provide for optional participation by insurers not required to participate under subsection 3.

5. Each plan must provide for the method of underwriting and classifying risks, making and filing rates, adjusting and processing claims and any other insurance or investment function that is necessary for the purpose of providing essential insurance coverage.

6. In providing for the recoupment of deficits which may be incurred in the plan, an option must be offered to an insured each policy year to pay a capital stabilization charge which must not exceed 100 percent of the premium charged to the insured in that year. The Commissioner shall determine the amount of the charge from appropriate factors of loss experience and risk associated with the plan and the insured. An insured who pays the stabilization charge must not be required to pay any assessment to recoup a deficit in the plan incurred in any policy year for which the charge is paid. The plan must provide for the return to the insured of so much of the insured’s payment as remains after all actual or potential liabilities under the policy have been discharged.

7. The plan must specify the basis of participation and assessment of insurers as necessary and must provide for the participation of agents and the conditions under which risks must be accepted.

8. Every participating insurer and agent shall provide to any person seeking coverages of kinds available in the plans the services prescribed in the plans, including full information on the requirements and procedures for obtaining coverage under the plans whenever the business is not placed in the voluntary market.

9. The plan must specify what commission rates must be paid for business placed in the plans.

10. If the Commissioner finds that the lack of cooperating insurers or agents in an area makes the functioning of the plan difficult, the Commissioner may order that the plan set up a branch service office or take other appropriate steps to insure that service is available.

(Added to NRS by 1971, 1706; A 1975, 402; 1977, 303; 1985, 1069)