Nevada § 616B.300 - Qualification as self-insured employer: Establishment of financial ability to pay; deposit or security; evidence of excess insurance; Account for Self-Insured Employers

§ 616B.300. Qualification as self-insured employer: Establishment of financial ability to pay; deposit or security; evidence of excess insurance; Account for Self-Insured Employers

1. An employer may qualify and remain qualified as a self-insured employer by establishing

to the satisfaction of the Commissioner that the employer has sufficient administrative

and financial resources to make certain the prompt payment of all compensation under

chapters 616A to 616D, inclusive, or chapter 617 of NRS . For the purposes of this subsection, an employer has sufficient financial resources

if: (a) At the time of initial qualification and until the employer has operated successfully

as a qualified self-insured employer for 3 years, as determined by the Commissioner,

the employer has a tangible net worth of not less than $2,500,000, as evidenced by

a statement of tangible net worth provided to the Division of Insurance of the Department

of Business and Industry by an independent certified public accountant; or (b) After 3 years of successful operation as a qualified self-insured employer, as

determined by the Commissioner, the employer has net cash flows from operating activities

plus net cash flows from financing activities of five times the average of claims

paid for each of the last 3 years or $7,500,000, whichever is less. 2. A self-insured employer must, in addition to establishing financial ability to

pay, deposit with the Commissioner a bond executed by the employer as principal, and

by a corporation qualified under the laws of this State as surety, payable to the

State of Nevada, and conditioned upon the payment of compensation for injuries and

occupational diseases to employees. The bond must be in an amount reasonably sufficient to ensure payment of compensation,

but in no event may it be less than 105 percent of the employer's expected annual

incurred cost of claims, or less than $100,000. In arriving at an amount for the expected annual cost of claims, due consideration

must be given to the past and prospective experience of the employer with losses and

expenses within this State, to the hazard of catastrophic loss, to other contingencies,

and to trends within the State. In arriving at the amount of the deposit required, the Commissioner may consider

the nature of the employer's business, the financial ability of the employer to pay

compensation and the employer’s probable continuity of operation. 3. In lieu of a bond, the employer may deposit with the Commissioner a like amount

of lawful money of the United States or any other form of security authorized by NRS 100.065 . If security is provided in the form of a savings certificate, certificate of deposit

or investment certificate, the certificate must state that the amount is unavailable

for withdrawal except upon order of the Commissioner. 4. The required deposit may be increased or decreased by the Commissioner in accordance

with chapter 681B of NRS and the Commissioner’s regulations for loss reserves in casualty insurance. If the Commissioner requires an employer to increase his or her deposit, the Commissioner

may specify the form of the additional security. The employer shall comply with such a requirement within 60 days after receiving

notice from the Commissioner. 5. The Commissioner shall require the self-insured employer to submit evidence of

excess insurance to provide protection against a catastrophic loss. The excess insurance must be written by an insurer authorized to do business in

this State. The Commissioner shall consider the excess insurance coverage as a basis for a reduction

in the deposit required of an employer. 6. The Account for Self-Insured Employers is hereby created in the State Agency Fund

for Bonds. All money received by the Commissioner pursuant to this section must be deposited

with the State Treasurer to the credit of the Account for Self-Insured Employers. All claims against this Account must be paid as other claims against the State are

paid.