1. A domestic insurer shall not reinsure with another insurer all or substantially all of its business in force, or of a major class thereof, or during a period of 6 consecutive months reinsure with another insurer over 20 percent of its insurance in force exclusive of individual risks currently reinsured in the ordinary course of business, except under an agreement of bulk reinsurance and in compliance with this section. No such agreement may become effective unless filed with the Commissioner and approved by the Commissioner in writing.

2. The Commissioner shall approve the agreement within a reasonable time after filing if the Commissioner finds that:

(a) The plan and agreement are fair and equitable to each insurer and to the policyholders involved;

(b) The reinsurance, if effectuated, would not substantially reduce the protection or service to the policyholders of any domestic insurer involved;

(c) The agreement embodies adequate provisions by which the reinsuring insurer becomes liable to the original insureds for any loss or damage occurring under the policies reinsured in accordance with the original terms of those policies;

(d) The assuming reinsurer is authorized to transact that insurance in this State, or is qualified for that authorization and will appoint the Commissioner and the successors of the Commissioner as its irrevocable attorney for service of process, so long as any policy so reinsured or claim thereunder remains in force or outstanding;

(e) The reinsurance would not materially tend to lessen competition in the insurance business in this State or elsewhere as to the kinds of insurance involved, and would not materially tend to create any monopoly as to that business; and

(f) The proposed bulk reinsurance is free of other reasonable objections.

3. If the Commissioner does not so approve the Commissioner shall forthwith notify each insurer involved in writing, specifying the reasons therefor.

4. If for reinsurance of all or substantially all of the business in force of a mutual insurer at a time when the insurer’s surplus is not impaired, the plan and agreement for reinsurance must be approved by a vote of not less than two-thirds of the mutual insurer’s members voting thereon at a meeting of members called for the purpose, pursuant to such reasonable notice and procedure as is provided for in the agreement. The agreement may provide for giving notice to members of a mutual insurer by publishing the notice once a week for 2 successive weeks in any two of the four cities of greatest population in each state in which the insurer is authorized, or by depositing the notice in the United States mail, postage prepaid, addressed to the member at his or her address last of record with the insurer, or by personal delivery. For a life insurer, the right to vote may be limited to members whose policies are other than term or group policies, and have been in effect for more than 1 year.

(Added to NRS by 1971, 1816; A 1979, 558)