REQUIRES TWO-THIRDS MAJORITY VOTE (§ 15)
A.B. 437
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ASSEMBLY BILL NO. 437–ASSEMBLYMEMBERS DICKMAN,
GRAY, GURR; DELONG AND GALLANT
MARCH 17, 2025
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Referred to Committee on Commerce and Labor
SUMMARY—Provides for the establishment of the Fair Access to
Insurance Requirements Plan. (BDR 57-103)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State: Yes.
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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
AN ACT relating to property insurance; creating the Fair Access to
Insurance Requirements Plan Association; requiring
the membership of certain authorized insurers in the
Association; creating the Board of Directors of the
Association and prescribing the duties of the Board;
requiring the Board to establish the Fair Access to
Insurance Requirements (FAIR) Plan; establishing the
requirements of the FAIR Plan; and providing other
matters properly relating thereto.
Legislative Counsel’s Digest:
Sections 2-18 of this bill provide for the establishment of the Fair Access to 1
Insurance Requirements (FAIR) Plan to provide property insurance coverage and 2
commercial property insurance coverage which results from the perils of fire or 3
certain other perils when such coverage is not otherwise available from an 4
authorized insurer in this State. Sections 2-8 define certain terms relating to the 5
FAIR Plan. Section 9 creates the Fair Access to Insurance Requirements Plan 6
Association to establish, offer and maintain the FAIR Plan. Section 9 requires any 7
authorized insurer that offers or sells certain property insurance or commercial 8
property insurance in this State to be a member of the Association. Sections 10-12 9
create the Board of Directors for the Association and prescribe the duties of the 10
Board, which include establishing the FAIR Plan, developing a plan of operation 11
for the FAIR Plan and making amendments to the plan of operation, subject to 12
approval of the Commissioner of Insurance. Section 12 establishes the required 13
contents of the plan of operation for the FAIR Plan. Sections 12 and 17 authorize 14
the Commissioner to adopt regulations relating to the FAIR Plan. Section 13 15
authorizes the Commissioner to revoke approval of all or part of the plan of 16
operation and make changes to the plan of operation if the plan of operation is 17
insufficient. Sections 14 and 15 establish provisions governing the issuance of 18
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policies and collecting certain fees from Association members. Section 16 19
authorizes the Commissioner to take certain actions against an Association member 20
who fails to pay certain fees or otherwise comply with the plan of operation for the 21
FAIR Plan. Section 18 makes a final action or order of the Commissioner relating 22
to the FAIR Plan subject to judicial review. 23
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. Chapter 691A of NRS is hereby amended by 1
adding thereto the provisions set forth as sections 2 to 18, inclusive, 2
of this act. 3
Sec. 2. As used in sections 2 to 18, inclusive, of this act, 4
unless the context otherwise requires, the words and terms defined 5
in sections 3 to 8, inclusive, of this act have the meanings ascribed 6
to them in those sections. 7
Sec. 3. “Association” means the Fair Access to Insurance 8
Requirements Plan Association created by section 9 of this act. 9
Sec. 4. “Association member” means any authorized insurer 10
that offers or sells any property insurance or commercial property 11
insurance in this State. 12
Sec. 5. “Board” means the Board of Directors of the 13
Association created by section 10 of this act. 14
Sec. 6. “Commercial property insurance” means insurance 15
against direct loss to commercial property, including, without 16
limitation, buildings and the contents of buildings, which results 17
from the perils of fire or perils covered under extended coverage 18
insurance, vandalism or malicious mischief. The term does not 19
include commercial vehicle insurance or farm insurance. 20
Sec. 7. “FAIR Plan” means the Fair Access to Insurance 21
Requirements Plan established by the Board pursuant to section 22
11 of this act. 23
Sec. 8. “Property insurance” means insurance against direct 24
loss to residential property, including, without limitation, buildings 25
and the contents of buildings, which results from the perils of fire 26
or perils covered under extended coverage insurance, vandalism 27
or malicious mischief. The term does not include vehicle 28
insurance or farm insurance. 29
Sec. 9. 1. There is hereby created the Fair Access to 30
Insurance Requirements Plan Association, which is a nonprofit 31
unincorporated public entity. All Association members are and 32
remain members of the Association as a condition of the authority 33
of each Association member to transact insurance or reinsurance 34
in this State. 35
2. The Association shall: 36
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(a) Exercise its powers through the Board; and 1
(b) Perform its functions under a plan of operation established 2
and approved pursuant to section 12 of this act. 3
3. The Association is established to provide property 4
insurance coverage and commercial property insurance coverage 5
when such coverage is not otherwise available from an authorized 6
insurer. The Association: 7
(a) Shall establish, offer and maintain a policy of property 8
insurance and a policy of commercial property insurance in 9
accordance with the requirements of the FAIR Plan. 10
(b) Shall assess and share among Association members, on a 11
fair and equitable basis, all expenses, income and losses based on 12
the written premium of each Association member for property 13
insurance and commercial property insurance consistent with 14
sections 2 to 18, inclusive, of this act. 15
(c) May issue policies of property insurance and commercial 16
property insurance, reinsure any such policies in whole or in part, 17
cede any such reinsurance or transfer risk to other capital 18
markets. 19
(d) Shall establish an Internet website available to the public 20
which includes information about the FAIR Plan. The Internet 21
website must include a toll-free telephone number that a person 22
may use to obtain information about the FAIR Plan. 23
Sec. 10. 1. There is hereby created the Board of Directors 24
of the Association, as the governing body of the Association and to 25
administer the FAIR Plan, consisting of the following nine 26
members appointed by the Governor: 27
(a) Two members representing mutual insurers that write 28
property insurance in this State; 29
(b) Two members representing stock insurers that write 30
property insurance in this State; 31
(c) One member representing a trade association based in this 32
State that represents insurers of various property interests; 33
(d) One member representing a trade association based in this 34
State that represents independent agents who are licensed to write 35
property and casualty insurance in this State; 36
(e) One member who is a producer of insurance licensed to 37
write property and casualty insurance in this State; and 38
(f) Two members, one of whom resides in Northern Nevada 39
and one of which resides in Southern Nevada, representing the 40
interests of consumers and, to the extent practicable, representing 41
consumer advocacy organizations. 42
2. The term of each member of the Board appointed pursuant 43
to paragraphs (a) to (f), inclusive, of subsection 1 is 3 years. A 44
member may be reappointed for up to three additional terms of 3 45
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years in the same manner as the original appointment. A vacancy 1
occurring in the membership of the Board must be filled in the 2
same manner as the original appointment. 3
3. The Board shall annually elect a Chair from among its 4
members. 5
4. The Board shall meet at least annually and may meet at 6
such further times as deemed necessary by the Chair. The Board 7
shall adopt rules for its own management and governance. 8
5. The Board may, on its own initiative or at the request of 9
the Commissioner, and subject to the approval of the 10
Commissioner, amend the FAIR Plan. 11
6. On or before April 1, 2027, and on or before each April 1 12
thereafter, the Board shall submit to the Commissioner, in the 13
form and manner determined by the Commissioner, a report 14
concerning the FAIR Plan during the preceding calendar year. 15
The report must include information concerning: 16
(a) The financial condition of the FAIR Plan; 17
(b) The number of policies and the coverage available through 18
the FAIR Plan; 19
(c) The number and types of claims made under the FAIR 20
Plan; and 21
(d) A description of the sufficiency of coverage under the 22
FAIR Plan and the sufficiency of finances of the FAIR Plan. 23
7. In addition to the requirements of subsection 6, the 24
Commissioner may require the Board to submit quarterly reports 25
or may examine the affairs of the Association if the Commissioner 26
determines that such action is necessary to ensure the continued 27
solvency of the FAIR Plan. 28
Sec. 11. 1. The Board shall establish the Fair Access to 29
Insurance Requirements Plan, in accordance with the 30
requirements of sections 2 to 18, inclusive, of this act, and any 31
regulations adopted pursuant thereto. 32
2. Rates for the FAIR Plan must: 33
(a) Not be excessive, inadequate or unfairly discriminatory; 34
(b) Be actuarially sound so that revenue generated from 35
premiums is adequate to pay for expected losses, expenses and 36
taxes; 37
(c) Reflect the investment income of the FAIR Plan; and 38
(d) Reflect the cost of reinsurance or other capital risk transfer 39
markets. 40
3. All rate filing documentation and review requirements set 41
forth in this title apply to the FAIR Plan. 42
Sec. 12. 1. On or before July 1, 2026, the Board shall 43
establish and submit to the Commissioner a plan of operation for 44
the FAIR Plan which satisfies the requirements of sections 2 to 18, 45
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inclusive, of this act. The plan of operation and any amendments 1
to the plan of operation become effective upon written approval of 2
the Commissioner. 3
2. The plan of operation for the FAIR Plan must provide for: 4
(a) The lines of insurance coverage which are to be written. 5
(b) Coverage limits for: 6
(1) Property insurance, in an amount which must be 7
$750,000 or less; and 8
(2) Commercial property insurance, in an amount which 9
must be $5,000,000 or less. 10
(c) The policy forms which are to be used. 11
(d) The perils which are to be covered. 12
(e) The establishment of reasonable standards for 13
underwriting to determine the eligibility of a risk, including 14
requirements for mitigation and inspection of property. 15
(f) Any compensation or commission which is to be paid to a 16
producer of insurance who offers the FAIR Plan. 17
(g) Procedures for the collection of fees, including the times at 18
which fees will be collected, from Association members. 19
(h) Assessments against Association members, which must be 20
in the proportion that the premiums received by each assessed 21
Association member bear to premiums received for all assessed 22
Association members, for the 3 most recent calendar years for 23
which such information is available. As used in this paragraph, 24
“premiums received” means premiums received on property 25
insurance lines and commercial property insurance lines in this 26
State. 27
(i) Administration of the FAIR Plan by the Board, including 28
any servicing agreements into which the Board may enter to 29
support the operations of the Association. 30
(j) Any other matter necessary or convenient for the purpose of 31
assuring fair access to the FAIR Plan. 32
3. If the Board fails to submit a plan of operation in 33
compliance with the requirements of this section, or fails to timely 34
submit suitable amendments to the plan of operation, the 35
Commissioner shall adopt regulations that are necessary to 36
effectuate the provisions of sections 2 to 18, inclusive, of this act. 37
Any regulation adopted pursuant to this subsection must, if the 38
Board subsequently submits a suitable plan of operation or 39
suitable amendments, allow the subsequent plan of operation or 40
amendments, if approved by the Commissioner, to supersede 41
regulations adopted by the Commissioner pursuant to this 42
subsection. 43
Sec. 13. 1. The Commissioner may revoke approval of all 44
or part of an approved plan of operation for the FAIR Plan, in 45
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compliance with the requirements of this section, if the 1
Commissioner determines that the approved plan of operation is 2
insufficient to satisfy the requirements of sections 2 to 18, 3
inclusive, of this act. 4
2. The Commissioner shall give notice to the Board not less 5
than 30 days before the date on which the Commissioner intends 6
to revoke all or part of the plan of operation. Not later than 30 7
days after the date on which the Board receives notice from the 8
Commissioner, the Board may submit a revised plan of operation 9
or a revised part of a plan for operation to the Commissioner for 10
review and approval. 11
3. If the Board fails to timely submit a revised plan of 12
operation pursuant to subsection 2, the Commissioner may make 13
changes to the existing plan of operation to ensure the plan of 14
operation satisfies the requirements of sections 2 to 18, inclusive, 15
of this act. Any changes made pursuant to this subsection do not 16
affect the validity of a policy executed before the date on which the 17
changes are effective. 18
4. If the Board subsequently submits a suitable plan of 19
operation which satisfies the requirements of sections 2 to 18, 20
inclusive, of this act and is approved by the Commissioner, that 21
subsequent plan of operation must supersede any changes made 22
by the Commissioner pursuant to subsection 3. 23
Sec. 14. The Association shall not sell a policy subject to 24
sections 2 to 18, inclusive, of this act directly to any person or 25
entity. A policy of the Association may only be issued through a 26
producer of insurance, who shall, on behalf of a person or entity 27
and as part of the submittal of an application for a policy, include 28
evidence of not less than three declinations of coverage for the 29
property at issue. 30
Sec. 15. 1. The Association may collect fees from 31
Association members to ensure sufficient revenue to start the 32
Association. An Association member: 33
(a) Who pays a fee pursuant to this subsection may recoup the 34
amount of the fee directly from policyholders; and 35
(b) Shall not increase premiums based on a fee which is 36
assessed pursuant to this subsection. 37
2. The Association may collect fees from Association 38
members as needed, subject to the approval of the Commissioner, 39
to meet the financial obligations of the Association. An 40
Association member: 41
(a) Who pays a fee pursuant to this subsection may recoup the 42
amount of the fee over a reasonable amount of time in the form of 43
a surcharge on policyholders; and 44
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(b) Shall not increase premiums based on a fee which is 1
assessed pursuant to this subsection. 2
3. A fee collected pursuant to subsection 1 or 2 must not be 3
considered a premium for any purpose, including, without 4
limitation, for the computation of any tax on gross premium 5
income or any commission of a producer of insurance. 6
4. If the Commissioner determines at any time that the 7
Association is or may become unable to meet the financial 8
obligations of the association, the Commissioner shall direct the 9
Board to assess and collect fees pursuant to subsection 2 in an 10
amount which is sufficient to restore the ability of the Association 11
to meet its obligations. 12
5. The Association may abate or defer, in whole or in part, a 13
fee assessed to an Association member if, in the opinion of the 14
Board, payment of the fee would endanger the solvency of the 15
Association member. The Association may assess the amount of 16
any fee or part of a fee which is abated or deferred pursuant to 17
this subsection against other Association members. 18
Sec. 16. If an Association member fails to timely pay a fee or 19
comply with the plan of operation pursuant to sections 2 to 18, 20
inclusive, of this act, the Commissioner may: 21
1. After notice and a hearing, suspend or revoke the 22
certificate of authority to transact insurance or reinsurance in this 23
State of the Association member. 24
2. Impose a fine on the Association member, in an amount 25
which must be the greater of $5,000 or the amount of the fee plus 26
interest and the costs of enforcement by the Commissioner. 27
Sec. 17. The Commissioner may adopt regulations to carry 28
out the provisions of sections 2 to 18, inclusive, of this act. 29
Sec. 18. A final action or order of the Commissioner issued 30
pursuant to sections 2 to 18, inclusive, of this act is subject to 31
judicial review in a court of competent jurisdiction pursuant to the 32
procedure provided in chapter 233B of NRS for contested cases. 33
Sec. 19. Notwithstanding the provisions of section 10 of this 34
act, as soon as practicable on or after October 1, 2025, the Governor 35
shall appoint the members of the Board of Directors of the Fair 36
Access to Insurance Requirements Plan Association as follows: 37
1. For the members identified in paragraph (a) of subsection 1 38
of section 10 of this act, one member to an initial term of 1 year and 39
one member to an initial term of 3 years; 40
2. For the members identified in paragraph (b) of subsection 1 41
of section 10 of this act, one member to an initial term of 1 year and 42
one member to an initial term of 3 years; 43
3. For the member identified in paragraph (c) of subsection 1 44
of section 10 of this act, to an initial term of 2 years; 45
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4. For the members identified in paragraphs (d) and (e) of 1
subsection 1 of section 10 of this act, to initial terms of 1 year; and 2
5. For the members identified in paragraph (f) of subsection 1 3
of section 10 of this act, one member to an initial term of 2 years 4
and one member to an initial term of 3 years. 5
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