1. When the Commissioner upon investigation finds that a domestic society:

(a) Has exceeded its powers;

(b) Has failed to comply with any provision of this chapter;

(c) Is not fulfilling its contracts in good faith;

(d) Has a membership of less than 400 after an existence of 1 year or more; or

(e) Is conducting business fraudulently or in a manner hazardous to its members, creditors, the public or the business,

the Commissioner shall notify the society of his or her findings, state in writing the reasons for the Commissioner’s dissatisfaction, and issue a written order requiring the society to make the necessary corrections. If the Commissioner finds that the society has failed to comply with the order within 30 days after receiving it, the Commissioner shall notify the society of his or her finding of noncompliance and require the society to show cause on a date named why it should not be enjoined from carrying on any business until the violation complained of has been corrected, or why an action in quo warranto should not be commenced against the society.

2. If on that date the society does not present good and sufficient reasons why it should not be so enjoined or why such action should not be commenced, the Commissioner may present the facts relating thereto to the Attorney General, who shall, if he or she deems the circumstances warrant, commence an action to enjoin the society from transacting business or an action in quo warranto.

3. The court shall thereupon notify the officers of the society of a hearing. If, after a full hearing, it appears that the society should be so enjoined or liquidated or a receiver appointed, the court shall enter the necessary order.

4. A society that is so enjoined shall not do business until:

(a) The Commissioner finds that the violation complained of has been corrected;

(b) The costs of the action have been paid by the society, if the court finds that the society was in default as charged;

(c) The court has dissolved its injunction; and

(d) The Commissioner has reinstated the certificate of authority.

5. If the court orders the society liquidated, it must be enjoined from carrying on any further business, whereupon the receiver of the society shall proceed at once to take possession of the books, papers, money and other assets of the society and, under the direction of the court, proceed forthwith to close the affairs of the society and to distribute its funds to those entitled thereto.

6. No action under this section may be recognized in any court of this state unless brought by the Attorney General upon request of the Commissioner. Whenever a receiver is to be appointed for a domestic society, the court shall appoint the Commissioner as the receiver.

7. The provisions of this section relating to hearing by the Commissioner, action by the Attorney General at the request of the Commissioner, hearing by the court, injunction and receivership apply to a society which voluntarily determines to discontinue business.

(Added to NRS by 1971, 1850; A 1991, 238)