Nevada Revised Statutes
Chapter 686B - Rates and Essential Insurance
NRS 686B.170 - Examination of service organizations by Commissioner.

1. Whenever the Commissioner deems it necessary in order to inform himself or herself about any matter related to the enforcement of the insurance laws, the Commissioner may examine the affairs and condition of any rate service organization under subsection 1 of NRS 686B.130. So far as reasonably necessary for an examination pursuant to this subsection, the Commissioner may examine the accounts, records, documents or evidences of transactions, so far as they relate to the examinee, of any officer, manager, general agent, employee, person who has executive authority over or is in charge of any segment of the examinee’s affairs, person controlling or having a contract under which the person has the right to control the examinee whether exclusively or with others, person who is under the control of the examinee, or any person who is under the control of a person who controls or has a right to control the examinee whether exclusively or with others. On demand every examinee under this subsection shall make available to the Commissioner for examination any of its own accounts, records, documents or evidences of transactions and any of those of the persons listed in this subsection.
2. The Commissioner shall examine every licensed rate service organization at intervals to be established by rule.
3. In lieu of all or part of an examination conducted pursuant to subsections 1 and 2, or in addition to it, the Commissioner may order an independent audit by certified public accountants or actuarial evaluation by actuaries approved by the Commissioner of any person subject to the examination requirement. Any accountant or actuary selected is subject to rules respecting conflicts of interest promulgated by the Commissioner. Any audit or evaluation conducted pursuant to this subsection is subject to subsections 6 to 15, inclusive, so far as appropriate.
4. In lieu of all or part of an examination conducted pursuant to this section, the Commissioner may accept the report of an audit already made by certified public accountants or actuarial evaluation by actuaries approved by the Commissioner, or the report of an examination made by the insurance department of another state.
5. An examination may cover comprehensively all aspects of the examinee’s affairs and condition. The Commissioner shall determine the exact nature and scope of each examination, and in doing so shall take into account all relevant factors, including but not limited to the length of time the examinee has been operating, the length of time the examinee has been licensed in this state, the nature of the services provided, the nature of the accounting records available and the nature of examinations performed elsewhere.
6. For each examination conducted pursuant to this section, the Commissioner shall issue an order stating the scope of the examination and designating the examiner in charge. Upon demand a copy of the order must be exhibited to the examinee.
7. Any examiner authorized by the Commissioner shall, so far as necessary to the purposes of the examination, have access at all reasonable hours to the premises and to any books, records, files, securities, documents or property of the examinee and to those of persons listed in subsection 1 so far as they relate to the affairs of the examinee.
8. The officer, employees and agents of the examinee and of persons listed in subsection 1 shall comply with every reasonable request of the examiners for assistance in any matter relating to the examination. A person shall not obstruct or interfere with the examination in any way other than by legal process.
9. If the Commissioner finds the accounts or records to be inadequate for proper examination of the condition and affairs of the examinee or improperly kept or posted, the Commissioner may employ experts to rewrite, post or balance them at the expense of the examinee.
10. The examiner in charge of an examination shall make a proposed report of the examination which must include such information and analysis as is ordered in subsection 6, together with the examiner’s recommendations. Preparation of the proposed report may include conferences with the examinee or the representatives of the examinee at the option of the examiner in charge. The proposed report is confidential until filed in accordance with subsection 11.
11. The Commissioner shall serve a copy of the proposed report upon the examinee. Within 20 days after service, the examinee may serve upon the Commissioner a written demand for a hearing on the contents of the report. If a hearing is demanded, the Commissioner shall give notice and hold a hearing pursuant to NRS 679B.310 to 679B.370, inclusive, except that on demand by the examinee the hearing must be private. Within 60 days after the hearing or if no hearing is demanded then within 60 days after the last day on which the examinee might have demanded a hearing, the Commissioner shall adopt the report with any necessary modifications and file it for public inspection, or the Commissioner shall order a new examination.
12. The Commissioner shall forward a copy of the examination report to the examinee immediately upon adoption, except that if the proposed report is adopted without change, the Commissioner need only so notify the examinee.
13. The examinee shall forthwith furnish copies of the adopted report to each member of its board of directors or other governing board.
14. The Commissioner may furnish, without cost or at a price to be determined by the Commissioner, a copy of the adopted report to the insurance commissioner of each state in the United States and of each foreign jurisdiction in which the examinee is licensed and to any other interested person in this state or elsewhere.
15. In any proceeding by or against the examinee or any officer or agent thereof the examination report as adopted by the Commissioner is admissible as evidence of the facts stated therein. In any proceeding by or against the examinee, the facts asserted in any report properly admitted in evidence are presumed to be true in the absence of contrary evidence.
16. The reasonable costs of an examination conducted pursuant to this section must be paid by the examinee except as otherwise provided in subsection 19. These costs include the salary and expenses of each examiner and any other expenses which are directly apportioned to the examination.
17. The amount payable pursuant to subsection 16 is due 10 days after the examinee has been served a detailed account of the costs.
18. The Commissioner may require any examinee, before or from time to time during an examination to deposit with the State Treasurer such deposits as the Commissioner deems necessary to pay the costs of the examination. Any deposit and any payment made pursuant to subsections 16 and 17 must be deposited in the Fund for Insurance Administration and Enforcement.
19. On the examinee’s request or on the motion of the Commissioner, the Commissioner may pay all or part of the costs of an examination whenever the Commissioner finds that, because of the frequency of examinations or other factors, imposition of the costs would place an unreasonable burden on the examinee. The Commissioner shall include in his or her annual report information about any instance in which the Commissioner applied this subsection.
20. Deposits and payments made pursuant to subsections 16 to 19, inclusive, shall not be deemed to be a tax or license fee within the meaning of any statute. If any other state charges a per diem fee for examination of examinees domiciled in this state, any examinee domiciled in that other state shall pay the same fee when examined by the Commissioner of Insurance of this state.
(Added to NRS by 1971, 1704; A 1977, 811; 1991, 1820)

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