681B.030 Disallowance of asset arranged to deceive. 1. The Commissioner shall disallow as an asset or as a credit against liabilities any reinsurance found by him after a hearing thereon to have been arranged for the purpose principally of deception as to the ceding insurer’s financial condition as of the date of any financial statement of the insurer. Without limiting the general purport of the foregoing provision, reinsurance of any substantial part of the insurer’s outstanding risks contracted for in fact within 4 months prior to the date of any such financial statement and cancelled in fact within 4 months after the date of such statement, or reinsurance under which the reinsurer bears no substantial insurance risk or chance of net loss to itself, shall prima facie be deemed to have been arranged principally for the purpose of deception. 2. The Commissioner shall disallow as an asset any deposit, funds or other assets of the insurer found by him after a hearing thereon: (a) Not to be in good faith the property of the insurer; (b) Not freely subject to withdrawal or liquidation by the insurer at any time for the payment or discharge of claims or other obligations arising under its policies; and (c) To be resulting from arrangements made principally for the purpose of deception as to the insurer’s financial condition as at the date of any financial statement of the insurer. 3. The Commissioner may suspend or revoke the certificate of authority of any insurer which has knowingly been a party to any such deception or attempted deception. (Added to NRS by 1971, 1609) NRS 681B.040 Liabilities. In any determination of the financial condition of an insurer, capital stock and liabilities to be charged against its assets shall include: 1. The amount of its capital stock outstanding, if any. 2. The amount, estimated to be consistent with the provisions of this Code, necessary to pay all of its unpaid losses and claims incurred on or prior to the date of the statement, whether reported or unreported, together with the expenses of adjustment or settlement thereof. 3. With reference to life insurance policies and annuity contracts, and disability and accidental death benefits in or supplemental thereto: (a) The amount of reserves on life insurance policies and annuity contracts in force, valued according to the tables of mortality, rates of interest and methods adopted pursuant to this Code which are applicable thereto. (b) Reserves for disability benefits, for both active and disabled lives. (c) Reserves for accidental death benefits. (d) Any additional reserves which may be required by the Commissioner consistent with applicable customary and general practice in insurance accounting. 4. As to health insurance policies, the reserves required under NRS 681B.080. 5. With reference to insurance other than specified in subsections 3 and 4, and other than title insurance, the amount of the unearned premium reserves computed in accordance with NRS 681B.060 and 681B.070. 6. Taxes, expenses and other obligations due or accrued at the date of the statement. (Added to NRS by 1971, 1609) NRS 681B.050 Reserves for losses from casualty insurance. 1. As to casualty insurance transacted by it, each insurer shall maintain at all times reserves in an amount estimated in the aggregate to provide for payment of all losses and claims incurred, whether reported or unreported, which are unpaid and for which the insurer may be liable and to provide for the expenses of adjustment or settlement of losses and claims. The reserves must be computed in accordance with regulations adopted from time to time by the Commissioner upon reasonable consideration of the ascertained experience and the character of such kind of business for the purpose of adequately protecting the insured and the solvency of the insurer. 2. Whenever the loss and loss expense experience of the insurer show that reserves, calculated in accordance with those regulations, are inadequate, the Commissioner may require the insurer to maintain additional reserves. 3. The minimum reserve requirements prescribed by the Commissioner for unpaid losses and loss expenses incurred during each of the most recent 3 years for coverages included in the lines of business described in the insurer’s annual statement as workmen’s compensation, liability other than automobile (B.I.), and automobile liability (B.I.) must not be less than the following: For workmen’s compensation, 65 percent of premiums earned during each year less the amount already paid for losses and expenses incidental thereto incurred during the year; for liability other than automobile (B.I.) and automobile liability (B.I.), 60 percent of premiums earned during each year less the amount already paid for losses and expenses incidental thereto incurred during the year. 4. The Commissioner may, by regulation, prescribe the manner and form of reporting pertinent information concerning the reserves provided for in this section. (Added to NRS by 1971, 1610; A 1981, 105) NRS 681B.060 Reserve for unearned premiums. 1. As to property, casualty and surety insurance the insurer shall maintain as a liability an unearned premium reserve on all policies in force. 2. Except as provided in NRS 681B.070 as to marine and transportation risks, the unearned premium reserve shall be equal to the unearned portion of gross premiums in force (after deduction of applicable reinsurance in solvent insurers) computed on an annual, monthly or more frequently pro rata basis. (Added to NRS by 1971, 1611) NRS 681B.070 Reserve for unearned premiums for marine and transportation insurance. As to marine and transportation insurance, the entire amount of premiums on trip risks not terminated shall be deemed unearned; and the Commissioner may require the insurer to carry a reserve equal to 100 percent of premiums on trip risks written during the month ended as of the date of statement. (Added to NRS by 1971, 1611) NRS 681B.080 Reserves for policies of health insurance. For all health insurance policies the insurer shall maintain an active life reserve which shall place a sound value on its liabilities under such policies and be not less than the reserve according to appropriate standards set forth in regulations issued by the Commissioner and, in no event, less in the aggregate than the pro rata gross unearned premiums for such policies. (Added to NRS by 1971, 1611) NRS 681B.100 Contingency reserves for insurance of repayment of debt secured by mortgage. 1. Casualty or surety insurers insuring real property mortgage lenders against loss by reason of nonpayment of the mortgage indebtedness by the borrower shall maintain a contingency reserve for the protection of policyholders against the effects of adverse economic cycles. 2. The insurer shall contribute to such contingency reserve 50 percent of net premiums (gross premiums less premiums returned to policyholders) written on such insurance remaining after establishment of the unearned premium reserve. 3. Subject to the Commissioner’s approval, the contingency reserve shall be available for payment of losses only when the insurer’s incurred losses in any 1 calendar year exceed the rate formula expected losses by 10 percent of the related earned premiums. (Added to NRS by 1971, 1612) NRS 681B.110 Standard of valuation: Valuation and calculation of reserves; acceptance of valuation by another state or jurisdiction. 1. The Commissioner shall, in the manner provided by NRS 681B.110 to 681B.150, inclusive, annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance policies and annuity and pure endowment contracts of every life insurer doing business in this state, except that in the case of an a

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