LB 326 — Change provisions relating to the Unfair Insurance Trade Practices Act, the Nebraska Property and Liability Insurance Guaranty Association Act, and mutual insurance holding companies and eliminate the provisions of the Health Insurance Access Act and the Health Care Purchasing Pool Act

LB326 LB326 2025 LEGISLATURELEGISLATIVE OFBILL NEBRASKA326 ONEApproved HUNDREDby NINTHthe LEGISLATUREGovernor FIRSTApril SESSION14, LEGISLATIVE2025 BILL 326 FINAL READING   Introduced by Jacobson, 42.

Read  firstA timeBILL JanuaryFOR 16,AN 2025ACT Committee:relating to insurance;

Banking, Commerce and Insurance A BILL FOR AN ACT relating to insurance;

to change provisions relating to the board of directors of the Nebraska Property and Liability Insurance Guaranty Association and first-partyfirst- party and third-third-party party claims;

Be it enacted by the people of the State of Nebraska, -1- LB326 LB326 2025 Section 1.

(6) (4) Insurer means shall mean any person, reciprocal exchange, interinsurer, Lloyds-type insurer or other similar group which includes an incorporated and individual unincorporated underwriter underwriters, a fraternal benefit society, or and other legal entity engaged in the business of insurance, including an agent agents, a broker brokers, an insurance consultant consultants, an adjuster adjusters, or a and third-third-party party administrator administrators.

(7) Lead generating device means a communication directed to the -2- LB326 LB326 2025 public that, regardless of form, content, or stated purpose, is intended to result in the compilation or qualification of a list containing names and other personal information to be used to solicit residents of this state for the purchase of what is, or what purports to be, a health insurance product or service;

44-1524 It shall be an unfair trade practice in the business of insurance for any insurer, health insurance lead generator, or person engaged in the business of insurance to commit any act or practice defined in section 44-1525 if the act or practice (1) is committed flagrantly and in conscious disregard of the Unfair Insurance Trade Practices Act or any rule or regulation adopted pursuant to the act or (2) is has been committed with such frequency as to -1- LB326 LB326 2025 indicate a general business practice to engage in that type of conduct.

-3- LB326 LB326 2025 (1) Making, issuing, circulating, or causing to be made, issued, or circulated an any estimate, illustration, circular, statement, sales presentation, omission, or comparison which:

(2) Making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, electronic mail, Internet advertisement or posting, or other publication, or in the form of a notice, circular, pamphlet, letter, electronic posting of any kind, or poster, or communication over a any radio or television station, or via the Internet or other electronic means, or in any other way, an advertisement, announcement, or statement containing an any assertion, representation, or statement with respect to the business of insurance or with respect to an any insurer in the conduct of the insurer's his or her insurance business which is -4- LB326 LB326 2025 untrue, deceptive, or misleading;

(6) Issuing or delivering or permitting an agent agents, officer officers, or employee employees to issue or deliver agency company stock or other capital stock, or benefit certificates or shares in any common-common-law law corporation, or securities or a any special or advisory board contract contracts or other contract contracts of any kind promising returns and profits as an inducement to insurance;

(7)(a) Making or permitting any unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for a any life insurance policy or annuity or in the dividends or -5- LB326 LB326 2025 other benefits payable thereon or in any other of the terms and conditions of such policy or annuity;

(d) Making or permitting any unfair discrimination between individuals or -2- LB326 LB326 2025 risks of the same class and of essentially the same hazards by refusing to issue, refusing to renew, canceling, or limiting the amount of insurance coverage on a residential property risk, or the personal property contained therein, because of the age of the residential property unless:

This subdivision shall not -6- LB326 LB326 2025 prohibit an insurer from taking marital status into account for the purpose of defining an individual individuals eligible for dependent benefits;

or (ii) Giving, selling, purchasing, or offering to give, sell, or purchase as inducement to such policy or annuity or in connection therewith any stocks, bonds, or other securities of an any insurer or other corporation, association, partnership, or limited liability company, or any dividends or profits accrued thereon, or anything of -7- LB326 LB326 2025 value not specified in the policy or annuity.

-8- LB326 LB326 2025 (11) Failing of an any insurer, upon receipt of a written inquiry from the department, to respond to such inquiry or request additional reasonable time to respond within fifteen working days;

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In the case of a depository institution, the director may examine and investigate the insurance activities of a depository institution in order to determine whether the depository institution has -9- LB326 LB326 2025 been, or is, engaged in an any unfair trade practice defined in section 44-1524.

(4) The director, upon such hearing, may administer oaths, examine and cross-examine witnesses, receive oral and documentary evidence, subpoena witnesses, compel their attendance, and require the production -10- LB326 LB326 2025 of books, papers, records, correspondence, or other documents which the director he or she deems relevant to the inquiry.

44-152944-1529 If, If, after the hearing, the director finds that the insurer, health insurance lead generator, or person charged has engaged in an unfair trade practice, the director he or she shall reduce the his or her -11- LB326 LB326 2025 findings to writing and shall issue and cause to be served upon the insurer, health insurance lead generator, or person charged with the violation a copy of such findings and an order requiring such insurer, health insurance lead generator, or person to cease and desist from engaging in the act or practice and the director he or she may order any one or more of the following:

and (2) Suspension or revocation of the insurer's license or certificate of -4- LB326 LB326 2025 authority if the insurer knew or reasonably should have known that the insurer he, she, or it was in violation of the act.

(3) No order of the director under the Unfair Insurance Trade -12- LB326 LB326 2025 Practices Act or order of a court to enforce such order shall in any way relieve or absolve a any person affected by such order from any liability under any other laws of this state.

(4)(a) Covered claim means shall mean an unpaid claim as provided for in the Nebraska Insurers Supervision, Rehabilitation, and Liquidation Act and which arises out of, and is within the coverage of, an insurance policy to which the Nebraska Property and Liability Insurance Guaranty Association Act applies issued by a member insurer that becomes insolvent after May 26, 1971, and (i) the claimant or insured is a resident of this state at the time of the insured event or (ii) the property from which -13- LB326 LB326 2025 the claim arises is permanently located in this state.

(c) (b) Covered claim does shall not include any amount due any reinsurer, insurer, liquidator, insurance pool, state or federal government program, or underwriting association, as a subrogation or assignment recovery recoveries or otherwise, a self-insured portion of the claim, a claim for any premium calculated on a retrospective basis, a premium any premiums subject to adjustment after the date of liquidation, -14- LB326 LB326 2025 or any amount due to an attorney or adjuster as a fee fees for services rendered to the insolvent insurer.

Nothing in this This subdivision (4)(b) shall not prevent a person from presenting the excluded claim to the insolvent insurer or its liquidator, -5- LB326 LB326 2025 but the claim shall not be asserted against any other person, including the person to whom benefits were paid or the insured of the insolvent insurer, except to the extent that the claim is outside the coverage or is in excess of the limits of the policy issued by the insolvent insurer;

(7) Net direct written premiums means shall mean direct gross premiums written in this state on insurance policies to which the Nebraska Property and Liability Insurance Guaranty Association Act applies, less return premiums thereon and dividends paid or credited to -15- LB326 LB326 2025 policyholders on such direct business.

Section 44-2406, Reissue Revised Statutes of Nebraska, is -16- LB326 LB326 2025 amended to read:

44-2406 (1)44-2406 (1) The association shall be obligated only to the extent of the covered claims existing prior to the date a member insurer becomes an insolvent insurer or arising within thirty days after it has been determined that the insurer is an insolvent insurer, before the policy expiration date, if less than thirty days after such determination, or before the insured replaces the policy or on request effects cancellation, if the insured he or she does so within thirty days of such dates, but such obligation shall include only the amount of each covered claim that does not exceed three hundred thousand dollars, except that the association shall pay the amount required by law on any covered claim arising out of a workers' compensation policy.

The association shall thereupon be considered to have been designated the director's representative pursuant to the act, and it shall proceed to investigate, hear, settle, and determine such claims unless the claimant shall, within thirty days from the date the claim is filed with the director, file with the director a written demand that the claim be processed in the -17- LB326 LB326 2025 liquidation proceedings as a claim not covered by the Nebraska Property and Liability Insurance Guaranty Association Act.

In regard to those claims transmitted to the association by the director, the association and claimants shall have all of the rights and obligations and be subject to the same limitations and procedures as are specified in the Nebraska Insurers -6- LB326 LB326 2025 Supervision, Rehabilitation, and Liquidation Act for the determination of claims.

The amount of any such award under this subsection shall be reduced by the amount the claimant is entitled to receive as the beneficiary under any health, accident, or disability insurance, under any salary or wage continuation program under which the claimant he or she is entitled to benefits, or from the claimant's his or her employer in the form of workers' compensation benefits, or any other such benefits to which the claimant is legally entitled, and any claimant who intentionally fails to correctly disclose a right his or her rights to any such benefits shall forfeit all rights which the claimant he or she may have by the provisions of the Nebraska Property and Liability Insurance Guaranty -18- LB326 LB326 2025 Association Act.

The association may make an assessment for the purpose of meeting administrative costs and other general expenses not related to a particular impaired insurer, not to -19- LB326 LB326 2025 exceed fifty dollars per member insurer in any one year.

All outstanding certificates -20- LB326 LB326 2025 shall be of equal -7- LB326 LB326 2025 dignity and priority without reference to amounts or dates of issue.

In addition, the rehabilitator or liquidator shall provide the association or its representative or such similar organization with copies of such records -21- LB326 LB326 2025 upon the request and at the expense of the association or similar organization.

The settlement, release, compromise, waiver, or judgment -22- LB326 LB326 2025 shall not be considered as evidence of liability or damages in connection with any claim brought against the association or any other party.

(f) Perform such other acts as are necessary or proper to effectuate the -8- LB326 LB326 2025 purpose of such act;

and (g) Bring any action against any third-party administrator, agent, attorney, or other representative of the insolvent insurer to obtain -23- LB326 LB326 2025 custody and control of all files, records, and electronic data related to an insolvent insurer that is appropriate or necessary for the association, or a similar organization in another state, to carry out duties under such act.

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